[Newsday] Learning the Brutal Language of…

When the sales calls reached their height last winter, Zuo Chen felt his resistance cave. Recently laid off, Chen said he was lured by daily pitches of foreign exchange trading firm International Financial Services Inc., promising him quick riches in a bear stock market. “They told me many stories that made the [currency trading] market attractive,” he said. By the time the company agreed to clise out his account in February, Chen, 33, of Weehawken, N.J., said IFS had lost nearly all of his $20,000 investment, leaving him with just $1,100.
He was one of the lucky ones. Government investigators had been probing the business dealings of IFS, based on Wall Street, the company was charged with bilking more than $15 million from some 400 unwitting investors, most of them non-English-speaking immigrants from China and Korea.
More recently, sources said, the U.S attorney’s office in Brooklyn is looking into the matter, probing possible criminal violations. Thus far no charges have been filed.
Last month, a federal judge issued a preliminary injunction barring IFS from engaging in foreign exchange trading, and freezing most of its accounts. Named in the suit are John Walker Robinson, the president and chief executive of IFS; Wilson Lai, the company’s principal; a Houston affiliate, and several related companies based in Hong Kong. Louis Burke, an attorney for the company, said, “I don’t believe my clients are guilty as charged.”
Two financial institutions that held IFS assets, JP Morgan Chase and Citibank N.A., were subpoenaed in the case, according to court records.
The government’s suit IFS lured investors with the promise of large financial gains through ads placed in Chinese, Korean and Russian-language newspapers throughout the New York metro area and across the country. At the same time, IFS recruited what it called “independent consultants” to hawk investments to the same communities, promising them hefty commissions. The consultants were encouraged to solicit investments from friends and families, many of whom unwittingly signed over power of attorney to IFS brokers, the government’s suit said.
“They were really preying on immigrants,” said Christine Bae, a Manhattan attorney who represents 30 clients who invested and lost between $20,000 and $100,000 each in IFS accounts.
Once their money was in IFS accounts, the company’s brokers gambled it on currency futures without making the proper offsetting positions until it was too late, according to the government’s suit. The company also charged investors $90 per transaction, a fee considerably higher than anticipated gains from currency trades, the suit says.
Despite the probe, Bae isn’t optimistic of recovering all her clients’ losses: Only $1.2 million in assets has been frozen, she said