Abner Tinoco Fined $31M in Crypto Ponzi Scheme Case
CFTC wins major ruling in 3-year fraud case over $3.9M
The U.S. Commodity Futures Trading Commission (CFTC) has secured a massive victory in its fraud case against Abner Alejandro Tinoco and his firm Kikit & Mess Investments, LLC, with a federal judge ordering over $31 million in penalties and restitution.
The ruling, delivered by Judge David C. Guaderrama, ends a legal battle that began in October 2021, when the CFTC accused Tinoco and his firm of soliciting and misappropriating over $3.9 million from at least 61 clients. The funds were intended for trading in foreign exchange and cryptocurrency markets, but were instead funneled into luxury items and personal expenses.
Lavish Spending and Ponzi Tactics
According to court documents and investigations, Tinoco used investors’ money to purchase a private jet, luxury cars, a mansion, and multiple real estate properties. The defendants also created fake investment returns to convince clients their money was growing, operating what the CFTC described as a Ponzi-style scheme.
Following initial action, Judge Guaderrama ordered a freeze on all assets tied to Tinoco and Kikit, while also compelling the defendants to provide full financial records.
In March 2022, a permanent injunction was granted, banning Tinoco and his firm from participating in any CFTC-regulated markets or violating the Commodity Exchange Act (CEA).
Final Judgment: $31M in Penalties and Restitution
On July 26, 2024, the court issued its final judgment:
$6.20 million in restitution to 199 fraud victims
$6.25 million in disgorgement, with credit applied for restitution payments
$18.7 million in civil monetary penalties, triple the stolen amount
This brings the total penalty to more than $31 million, signaling a clear warning to those engaging in crypto-related fraud.
Prison Sentence and DOJ Action
In a parallel criminal case, Tinoco was indicted by the U.S. Department of Justice (DOJ) in November 2022. He pleaded guilty to five counts of wire fraud and is currently serving an 84-month sentence at Federal Correctional Institution, Salford, Arizona. The court also ordered him to pay an additional $9.02 million in compensation to victims.
CFTC Statement
The CFTC emphasized its ongoing commitment to protecting investors in digital and foreign exchange markets, warning the public against unregistered firms promising guaranteed returns.
