Scheme Targeted Hundreds of Investors in Over 30 Countries, Including the United States
NEWARK, N.J. – A Thai man was arrested and charged with allegedly orchestrating a scheme to defraud hundreds of investors worldwide of at least $1.4 million through his operations of a purported online day trading firm, U.S. Attorney Paul J. Fishman announced today.
Naris Chamroonrat, 33, of Bangkok, Thailand, is charged by complaint with one count of conspiracy to commit securities fraud and one count of wire fraud. Chamroonrat was arrested by special agents of the FBI on Dec. 20, 2016, at the Los Angeles International Airport in California. He is scheduled to appear later today before U.S. Magistrate Judge Frederick Mumm in Los Angeles federal court.
According to the complaint:
From December 2013 to June 2015, Chamroonrat and his conspirators allegedly solicited individual investors to open day-trading accounts with his company, Nonko Trading, and to wire thousands of dollars to the company to fund those accounts. Instead of using the money to fund the accounts, he and his conspirators allegedly stole $1.4 million from more than 260 investors in more than 30 countries. To cover up the theft, Chamroonrat provided the victims with online trading simulator, or “demo,” accounts, but told the investors they were real accounts to be used to trade securities. The majority of those funds were transferred to foreign bank accounts controlled by Chamroonrat and used for personal expenses or other unauthorized transactions. The victims of the scheme included at least 180 investors from the United States, including several in New Jersey.
Chamroonrat and others chose as victims those customers they believed would not make money day trading, and would therefore be less likely to try to withdraw funds from their accounts. These inexperienced, unsophisticated “losing” traders would simply believe they lost their money trading in the open markets. If traders on the demo accounts started to appear profitable, Nonko would switch them to real accounts.
Chamroonrat and his conspirators discussed the scheme in detail in email and online chat communications. In one online communication between Chamroonrat and a conspirator on Feb. 3, 2014, Chamroonrat allegedly discussed the scheme, which he commonly referred to as Nonko’s “TRZ Program.” He stated, “We also have the trz program, where instead [of] a live account it’s a trz account and if they blow it all up, then great, firm still profits.” The conspirator responded: “and thing with TRZ that freaks me out … THE ONLY THING … someone … will make money … what happens when they do make money?” Chamroonrat replied, “bump them off of trz, put them on a real account[,] give them more leverage in exchange for a profit split.”
The conspiracy count with which Chamroonrat is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
In a separate civil action, the Securities and Exchange Commission today filed a complaint in Newark federal court charging Chamroonrat with violating and aiding and abetting violations of the antifraud provisions of the securities laws. The complaint seeks a permanent injunction as well as the return of ill-gotten gains plus interest and penalties.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s charges. He also thanked the SEC for its valuable assistance in the investigation.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.