Judge John P. Cronan of the New York Southern District Court has slammed the United States Commodity Futures Trading Commission (CFTC) over the ways it has tried to effect service of its complaint against Casper Mikkelsen, who stands accused of Forex fraud.
The CFTC initiated this action on May 18, 2020. The Complaint alleges that Mikkelsen engaged in a fraudulent scheme to solicit and misappropriate money from at least 101 individuals and entities who invested their funds with an alleged company called GNTFX. The CFTC contends that Mikkelsen misappropriated at least $737,000 of client funds for his personal use and that in total purported investors lost at least $1.19 million.
As a result of this conduct, the Complaint alleges three counts of violations of the commodities laws.
On August 13, 2020, the CFTC filed a certificate of service in which counsel for the CFTC explained that he placed a copy of the Summons and Complaint in an envelope addressed to “Casper Muller, Defendant’s new legal name” and gave it to DHL International. According to the certificate of service, DHL then “personally served Casper Muller” with these documents on July 1, 2020 at an address in Denmark.
Defendant did not appear or answer the Complaint. A Clerk’s Certificate of Default was filed for Defendant on October 5, 2020. The CFTC filed a motion for default judgment on January 21, 2021, and a proposed default judgment order on January 25, 2021.
The Judge, however, has nixed the CFTC’s request for default judgment.
The Judge said that:
“All the CFTC has done to attempt to serve Defendant is place a copy of the Summons and Complaint in a sealed mailing envelope and give that envelope to DHL International.”
The CFTC could have attempted service through Denmark’s Central Authority, but apparently did not because “a representative from the Danish Ministry of Justice” informed counsel for the CFTC that “it would take up to eight months to serve the amended summons and complaint on Defendant under Article 5 of the Hague Convention.”
Although the CFTC now seeks court authorization pursuant to Rule 4(f)(3) to serve Defendant through Denmark’s Central Authority, service through the means proscribed by Article 5 of the Hague Convention does not require such an order. Instead, service through Denmark’s Central Authority is an “internationally agreed means of service” under Rule 4(f)(1).
That is why the Court denied the CFTC’s request to serve Defendant through alternative means pursuant to Rule 4(f)(3). The CFTC can renew this request at a later point if it makes a showing that it “has reasonably attempted to effectuate service on the defendant” and that “the circumstances are such that the court’s intervention is necessary.” However, because the CFTC does not need a court order under Rule 4(f)(3) to serve Defendant through Denmark’s Central Authority pursuant to Article 5 of the Hague Service Convention, it may do so on its own accord.
As FX News Group has reported, the regulator has moved the Court to grant final judgment by default against Casper Mikkelsen, order permanent injunctive relief, and impose a restitution obligation and civil monetary penalty.
The CFTC seeks that Casper Mikkelsen pays a civil monetary penalty of $3,573,860.61. The regulator is also pushing for a Court order directing Mikkelsen to pay $1,191,286.87 in restitution to the victims of the fraudulent FX schemes he operated.