Local traders charged in alleged $30 million fraud
Federal prosecutors in Boston accused the owners of a foreign currency trading company of defrauding more than 1,000 investors out of $30 million.
Craig A. Karlis, 50, of Hopkinton was charged with nine counts of wire fraud and two tax crimes, while his business partner, Ahmet Devrim Akyil, 38, formerly of Hingham, faces 10 counts of wire fraud.
According to an indictment released today, Karlis and Akyil founded a firm called Boston Trading and Research to invest customers' money in the foreign currency exchange market. By July 2008, the company had 1,200 customers and more than $35 million under management.
But prosecutors allege that Karlis and Akyil misled customers about how they would use the money. Instead of paying themselves a percentage of the profits, they diverted millions of dollars from customers account to cover company expenses and buy personal items, including houses, cars, and jewelry.
Karlis, who was arrested this morning, is scheduled to appear in federal court in Boston at 3 p.m. today. Akyil left the United States for Turkey last year.
If convicted of the charges, they face up to 20 years in prison and a $250,000 for each of the wire fraud charges. Karlis also faces up to three years in prison and $100,000 fine for the charge of filing a false tax document.
Separately, the Securities and Exchange Commission has also filed a civil suit against Karlis and Akyil.