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UNITED STATES DISTRICT COURT 

FOR THE SOUTHERN DISTRICT OF FLORIDA 

Case No.: -CivCOMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

vs. 

DANIEL FINGERHUT, DIGITAL 

PLATINUM, INC., DIGITAL PLATINUM, 

LTD, HUF MEDIYA, LTD (A.K.A. HOOF 

MEDIA LTD.), TAL VALARIOLA, and 

ITAY BARAK, 

Defendants, 

and 

AICEL CARBONERO, 

Relief Defendant. 

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Hon. 

COMPLAINT FOR INJUNCTIVE AND EQUITABLE RELIEF AND 

PENALTIES UNDER THE COMMODITY EXCHANGE ACT 

The Commodity Futures Trading Commission (“CFTC” or “Commission”), by and 

through its attorneys, hereby alleges as follows: 

I. SUMMARY 

1. Throughout the period of at least October 2013 and continuing through at least 

August 2018 (“Relevant Period”), two massive fraudulent solicitation schemes occurred, one 

involving binary options and the other digital assets, including Bitcoin and Ethereum. The 

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binary options fraud occurred between at least October 2013 and November 2016 (“Binary 

Options Period”); the digital assets fraud occurred between at least October 2016 and August 

2018 (“Digital Assets Period”). 

2. During the Binary Options Period, Defendant Digital Platinum Limited (“DPL”), 

through its control persons, Defendants Tal Valariola (“Valariola”) and Itay Barak (“Barak”), 

willfully aided and abetted All In Publishing LLC’s (“AIP”) fraudulent binary options affiliate 

marketing scheme that involved tens of millions of solicitations to prospective customers 

advising them to open and fund off-exchange binary options trading accounts involving foreign 

exchange currency pairings (“forex”), metals, and/or swaps through websites operated by 

unregistered, off-exchange binary options brokers who paid AIP and DPL commissions. AIP’s 

solicitations offered free access to trading systems that traded binary options automatically on 

behalf of customers once they opened and funded an account with the recommended broker 

(“Trading Systems”). 

3. AIP’s binary options marketing scheme involved at least twenty-four (24) 

fraudulent binary options campaigns, which DPL willfully aided and abetted by, among other 

things, willfully providing fraudulent sales videos that they procured for AIP’s campaigns, 

knowing solicitations that AIP created themselves included false or misleading statements, 

sharing AIP’s fraudulent solicitations with brokers and encouraging brokers to use the false or 

misleading statements in their further solicitations, supplying the Trading Systems that they 

knew did not operate as marketed, acting as an intermediary with brokers, and managing the 

funds resulting from their campaigns. 

4. Commencing in June 2014, Defendant Daniel Fingerhut intentionally or 

recklessly created and/or disseminated solicitations that he knew included false or misleading 

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statements about the Trading Systems for at least twenty (20) of those fraudulent binary options 

campaigns on behalf of AIP. 

5. During the Digital Assets Period, Fingerhut, as an agent of DPL and DPL’s 

related entities, Defendants Digital Platinum, Inc. (“DPI”) and Huf Mediya, Ltd. (“Huf”), also 

controlled by Valariola and Barak (Valariola, Barak, DPI, DPL and Huf are hereafter 

collectively referred to as “Digital Platinum Defendants”), engaged in a similar fraudulent 

solicitation scheme involving digital assets. Fingerhut managed Digital Platinum Defendants’ 

affiliate marketing program during this time, including by intentionally or recklessly creating 

and/or disseminating millions of fraudulent solicitations advising customers and prospective 

customers to open and fund digital assets trading accounts with brokers who paid Digital 

Platinum Defendants commissions for doing so. The fraudulent solicitations promised free 

access to automated trading software that purported to trade digital assets on behalf of customers 

automatically with no risk and guaranteed profits (“DA Trading Systems”). DPL and/or Huf, 

through the acts of control persons Valariola and Barak and other employees and agents of DPL 

and Huf, selected brokers for these campaigns, supplied the DA Trading Systems, and paid DPI 

and Fingerhut a portion of the commissions earned resulting from Fingerhut’s and his group’s 

solicitations. 

6. Fingerhut intentionally or recklessly created and/or disseminated millions of 

fraudulent solicitations between June 2014 and August 2018 that contained materially false or 

misleading statements about the marketed Trading Systems and DA Trading Systems, including: 

(i) fictitious trading performance and account statements showing consistent profits with no 

losses; (ii) actors depicted as true users and/or creators of the marketed trading software falsely 

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claiming they had earned significant profits automatically with the software; and/or (iii) false 

representations of actual live automated trading and results using the advertised software. 

7. Fingerhut had no legitimate source of income between June 2014 and August 

2018. Fingerhut paid off his mortgage with tainted funds in July 2018 and then quit-claimed the 

deed to his home to Relief Defendant Aicel Carbonero (“Carbonero”) for $10 in August 2018. 

Carbonero did not provide any legitimate services to AIP or Digital Platinum Defendants and 

does not have any interest in or entitlement to Fingerhut’s home. 

8. Upon receipt of an investigative subpoena in August 2018 concerning the 

Commission’s investigations related to affiliate marketing fraud, Fingerhut offered to cooperate, 

prepare a sworn declaration, and testify as a witness against his former colleagues. However, 

rather than fully and truthfully cooperate, Fingerhut intentionally or recklessly made materially 

false or misleading statements to Staff at the Commission’s Division of Enforcement (“Staff”) 

and under oath in an apparent effort to conceal the extent of his role in the fraud and avoid 

producing responsive documents and information. 

9. By virtue of this conduct and further conduct described below, Defendants have 

engaged, are engaging, or are about to engage, in acts and practices in violation of the following 

sections of the Commodity Exchange Act (“Act”), 7 U.S.C. §§ 1-26 (2018), and accompanying 

regulations (“Regulation(s)”), 17 C.F.R. Pts. 1-190 (2019), in that: 

(a) Between June 2014 and October 2016, Fingerhut, while acting as AIP’s agent 

violated Section 4c(b), 4o(1), and 6(c)(1) of the Act, 7 U.S.C. §§ 6c(b), 6o(1), 

9(1) (2018) and Regulations 32.9 and 180.1(a)(1)-(3), 17 C.F.R. §§ 32.9, 

180.1(a)(1)-(3) (2019), which prohibit commodity options fraud, fraud by a 

Commodity Trading Advisor (“CTA”), and deceptive devices, schemes and/or 

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artifices in connection with, among other things, commodities in interstate 

commerce and/or swap transactions (“swaps fraud”); 

(b) Between October 2013 and November 2016, DPL, Valariola, and Barak willfully 

aided and abetted AIP’s and Fingerhut’s violations of 7 U.S.C. §§ 6c(b), 9(1) and 

17 C.F.R. §§ 32.9 and 180.1(a)(1)-(3), which prohibit commodity options fraud 

and swaps fraud; 

(c) Between October 2016 and August 2018, Fingerhut and Digital Platinum 

Defendants violated 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3), which 

prohibits swaps fraud; and 

(d) Between August 2018 and at least May 2019, Fingerhut violated Section 6(c)(2) 

of the Act, 7 U.S.C. § 9(2) (2018), which prohibits false or misleading statements 

of material facts to the Commission. 

10. Accordingly, pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 (2018), the 

Commission brings this action to enjoin Defendants’ unlawful acts and practices and to compel 

Defendants’ compliance with the Act and Regulations, and to further enjoin Defendants from 

engaging in certain commodity options related activities. 

11. In addition, the Commission seeks civil monetary penalties and remedial ancillary 

relief, including, but not limited to, trading and registration bans, restitution, disgorgement, 

rescission, pre- and post-judgment interest, and such other relief as the Court may deem 

necessary and appropriate. 

12. Unless restrained and enjoined by this Court, Defendants are likely to continue to 

engage in the acts and practices alleged in this Complaint and similar acts and practices, as more 

fully described below. 

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II. JURISDICTION & VENUE 

13. This Court has jurisdiction over this action under 28 U.S.C. § 1331 (2018) 

(federal question jurisdiction) and 28 U.S.C. § 1345 (2018) (district courts have original 

jurisdiction over civil actions commenced by the United States or by any agency expressly 

authorized to sue by Act of Congress). Section 6c(a) of the Act, 7 U.S.C. § 13a-l(a) (2018), 

authorizes the Commission to seek injunctive relief against any person whenever it shall appear 

that such person has engaged, is engaging, or is about to engage in any act or practice that 

violates any provision of the Act or any rule, regulation, or order promulgated thereunder. 

14. Venue properly lies with this Court pursuant to Section 6c(e) of the Act, 7 U.S.C. 

§ 13a-1(e) (2018), because Defendants are found in, inhabit, or transact business in the Southern 

District of Florida, and the acts and practices in violation of the Act and Regulations have 

occurred within this District, among other places. 

III. THE PARTIES 

15. Plaintiff Commodity Futures Trading Commission is the independent federal 

regulatory agency charged with the administration and enforcement of the Commodity Exchange 

Act and regulations promulgated thereunder. 

Defendant Fingerhut & Relief Defendant 

16. Defendant Daniel Fingerhut is a resident of Miami Beach, Florida. Between at 

least June 2014 and October 2016, Fingerhut created and/or disseminated fraudulent solicitations 

related to binary options on behalf of AIP. Between October 2016 and August 2018, Fingerhut 

managed the marketing at DPI and at its related entities, DPL and Huf, and created, 

disseminated, and oversaw others creating and disseminating fraudulent solicitations related to 

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digital assets and digital assets options. Fingerhut has never been registered with the 

Commission in any capacity. 

17. Relief Defendant Aicel Carbonero (“Carbonero”) is a resident of Miami Beach, 

Florida. On August 16, 2018, Fingerhut transferred title of his home to Carbonero through a 

quit-claim deed for $10. Carbonero has never been registered with the CFTC in any capacity. 

18. Relief Defendant Carbonero did not perform any legitimate services for AIP or 

the Digital Platinum Defendants, and does not have any legitimate interest in or entitlement to 

those funds. 

 Digital Platinum Defendants

19. Defendant Digital Platinum Ltd. (“DPL”) is an Israeli company with its principal 

place of business in Tel Aviv. Between at least October 2013 and November 2016, DPL 

willfully aided and abetted AIP, where Fingerhut worked, to carry out the binary options fraud. 

DPL, through Valariola and Barak, acted as the intermediary between AIP and the recommended 

brokers, was responsible for the backend operations of the affiliate marketing campaigns, 

collected and distributed commission payments, procured sales videos for AIP to use in its 

campaigns, and supplied the marketed Trading Systems, among other things. Fingerhut began 

working with DPL and its related entities directly after leaving AIP around October 2016. 

During the ensuing Digital Assets period, Fingerhut acted as the agent of the Digital Platinum 

Defendants in managing and carrying out the fraudulent marketing activities involving digital 

assets. DPL has never been registered with the Commission in any capacity. 

21. Defendant Huf Mediya Ltd. (a.k.a. Hoof Media Ltd.) (“Huf”) is a Bulgarian 

company. On information and belief, Huf, DPL, and DPI are related entities, and Valariola and 

Barak are control persons of all three entities. Fingerhut invoiced Huf for his affiliate marketing 

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services for DPI and DPL beginning in July 2017 and Valariola directed him to execute a 

contract with Huf for his work related to Digital Platinum Defendants in December 2017. 

Beginning at least in August 2017, Huf sent DPI and Fingerhut money for the digital assets 

campaigns to bank accounts in the United States. Huf has never been registered with the CFTC 

in any capacity. 

22. Defendant Digital Platinum, Inc. (“DPI”) is an inactive Florida corporation 

organized on April 15, 2016 and located in Hollywood, Florida. The officers and directors of 

DPI include Defendants Barak and Valariola. DPL is the parent company of DPI. Fingerhut 

operated out of DPI’s Florida offices and acted as DPI’s agent in managing and carrying out the 

fraudulent solicitations involving digital assets. DPI has never been registered with the CFTC in 

any capacity. 

23. Defendant Tal Valariola (“Valariola”) is a resident of Tel Aviv, Israel. At all 

relevant times, Valariola owned and/or controlled DPL, DPI, and Huf. Between at least October 

2013 and November 2016: provided AIP with sales videos that depicted fictitious testimonials 

and trading results; knew that AIP created similar false or misleading solicitations and widely 

disseminated them to potential customers; shared AIP’s false or misleading solicitations with 

brokers to assist their efforts to further induce prospective customers to open and fund an 

account; supplied the marketed trading software (which did not perform as promised), served as 

the intermediary with brokers; and managed funds and results of campaigns related to the 

scheme. Between at least October 2016 and August 2018, Valariola, on behalf of DPL, DPI, and 

Huf, directed, approved, and participated in the digital assets solicitation scheme, including by 

retaining Fingerhut to manage the affiliate marketing component of the scheme that included 

generating false or misleading solicitations and widely disseminating them to potential 

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customers. Valariola, on behalf of DPL, DPI, and Huf, also directly or indirectly supplied the 

marketed trading software (which did not perform as promised), served as the intermediary with 

brokers, and managed funds related to the scheme. Valariola has never been registered with the 

CFTC in any capacity. 

24. Defendant Itay Barak (“Barak”) is a resident of Tel Aviv, Israel. Between at 

least October 2013 and November 2016, Barak, on behalf of DPL, directly or indirectly provided 

sales videos that depicted fictitious testimonials and trading results to AIP, knew that AIP 

created similar false or misleading solicitations and widely disseminate them to potential 

customers, supplied the marketed trading software (which did not perform as promised), served 

as the intermediary with brokers, and managed funds and results of campaigns related to the 

scheme. Between at least October 2016 and August 2018, Barak, on behalf of DPL, DPI, and 

Huf, directed, approved, and participated in the digital assets solicitation scheme, including by 

retaining Fingerhut to manage the affiliate marketing component of the scheme that included 

generating false or misleading solicitations and widely disseminating them to potential 

customers. Barak, on behalf of DPL, DPI, and Huf, also directly or indirectly supplied the 

marketed trading software (which did not perform as promised), served as the intermediary with 

brokers, and managed funds related to the scheme. Barak has never been registered with the 

CFTC in any capacity. 

IV. OTHER RELEVANT ENTITIES 

25. All In Publishing, LLC (“AIP”) is a Florida limited liability company with its 

principal place of business in Miami, Florida. AIP became inactive after the Binary Options 

Period. AIP has never been registered with the Commission in any capacity. 

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26. Timothy Atkinson (“Atkinson”) was the owner, member, and president of AIP 

during the Binary Options Period. Atkinson has never been registered with the Commission in 

any capacity. During the Binary Options Period, Fingerhut created and disseminated binary 

options solicitations for AIP and reported to Atkinson and another employee of AIP, Jay 

Passerino. Atkinson has never been registered with the Commission in any capacity. 

27. On September 27, 2018, Staff filed a binary options solicitation fraud complaint 

against AIP, Atkinson, Passerino, and Passerino’s company Gasher, Inc., in the Southern District 

of Florida. Complaint, CFTC v. Atkinson, No. 18-cv-23992-JEM (S.D. Fla. Filed Sept. 27, 2018) 

(ECF No. 1) (“Atkinson litigation”). Staff sought and obtained emergency relief in the Atkinson

litigation, Id. at ECF 48; the Honorable Jose E. Martinez (“Atkinson Court”) entered a Consent 

Order for Permanent Injunction against Atkinson and AIP on May 22, 2019, Id. at ECF 206, and 

a similar order against Passerino and Gasher, Inc. on February 12, 2020. Id. at ECF 237. 

28. Jay Passerino (“Passerino”) managed DPL, DPI and Huf’s operations in the 

United States during the Digital Assets Period and worked closely with Fingerhut during that 

time. Passerino has never been registered with the Commission in any capacity. 

29. Fingerhut Group, Inc. (“Fingerhut Group”) is a Florida corporation organized 

on March 13, 2014 and located in Miami Beach, Florida. Fingerhut voluntarily dissolved 

Fingerhut Group on April 30, 2018. Between March 13, 2014 and April 30, 2018, Fingerhut was 

the president and registered agent of Fingerhut Group. Fingerhut opened at least one bank 

account in the name of Fingerhut Group and received deposits into that account for his 

fraudulent activities at AIP and Digital Platinum Defendants during the Relevant Period. 

30. Recruiting Hut, LLC (“Recruiting Hut”) is a Florida limited liability company 

organized on July 2, 2015 and located in Miami Beach, Florida. On May 3, 2019, Fingerhut 

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filed articles of dissolution with the State of Florida for Recruiting Hut. According to corporate 

records, Fingerhut was the managing member and registered agent for Recruiting Hut at all times 

relevant. In Fingerhut’s 2018 annual report, Fingerhut identified Recruiting Hut’s principal 

place of business as the address for DPI’s office. Recruiting Hut has never been registered with 

the Commission in any capacity. 

31. Media Hut, Inc. (“Media Hut”) is a Florida corporation organized on March 28, 

2018 and located in Miami Beach, Florida. Fingerhut is the president and registered agent of 

Media Hut. During the Digital Asset Period, Media Hut received deposits from Digital Platinum 

Defendants for Fingerhut’s fraudulent affiliate marketing services. Media Hut has never been 

registered with the CFTC in any capacity. 

V. FACTS 

A. Background: Affiliate Marketing in Binary Options and Digital Assets 

32. Defendants engaged in fraud through affiliate marketing schemes. Affiliate 

marketing is a form of performance-based marketing that is predominantly conducted via email 

solicitations and promotional materials made available on internet websites. An affiliate 

marketing campaign is a promotion of a product/service designed to convince the audience to 

take a specific action, including purchasing a product or service or opening and funding a trading 

account. Affiliate marketing is referred to as a “campaign” or “funnel” because the advertising 

is designed to funnel (i.e., drive) customers to the service provider or product owner. Affiliate 

marketing occurs in various business segments, including Internet Marketing (“IM”), Business 

Opportunities (“BizOp”), Foreign Exchange (“Forex”), Binary Options, and Digital Assets. 

33. A binary option is a type of option contract in which the payout depends entirely 

on the outcome of a discrete event—usually a “yes/no” proposition. The yes/no proposition 

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typically relates to whether the price of a particular asset will rise above or fall below a specified 

amount at a specified date and time. For example, the yes/no proposition might be whether the 

price of silver will be higher than $33.40 per ounce at 11:17 am on a particular day, or if the 

exchange rate between the US Dollar and the Euro will be above $1.18 at 2:15 pm on a given 

day. 

34. Once the option holder acquires a binary option through payment of a premium, 

there is no further decision for the holder to make as to whether to exercise the binary option 

because binary options exercise automatically. Unlike other types of options, a binary option 

does not give the holder the right to purchase or sell the underlying asset—instead, it is “cash 

settled.” When the binary option expires, the option holder is entitled to a pre-determined 

amount of money if the customer has made a correct prediction. If the customer has made an 

incorrect prediction, he or she gets nothing and loses the entire premium paid. 

35. “Digital assets” is defined here as a digital representation of value that functions 

as a medium of exchange, a unit of account, and/or a store of value, but does not have legal 

tender status in any jurisdiction. The digital assets relevant to this complaint primarily involve 

Bitcoin, but also to some extent Ethereum. These and other digital assets are distinct from “real” 

currencies, which are the coin and paper money of the United States or currencies of other 

countries that are issued, designated and circulated as legal tender, and customarily used and 

accepted as a medium of exchange. 

B. Defendants’ Roles in the Fraudulent Solicitation Schemes 

1. Binary Options Scheme (October 2013-November 2016) 

a. Fingerhut’s Role (June 2014-October 2016) 

36. During much of the Binary Options Period, as an affiliate marketer and an 

unregistered Associated Person (“AP”) of AIP, an unregistered Commodity Trading Advisor 

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(“CTA”), Fingerhut solicited customers and prospective customers to open and fund trading 

accounts using Trading Systems that would purportedly automatically trade on their behalf in 

binary options involving forex, metals, commodities, swaps, and other underlying assets. 

37. Fingerhut did so by creating and/or disseminating solicitations that included 

materially false or misleading statements advising prospective customers to open an account and 

trade binary options with automated trading software through brokers that agreed to pay AIP and 

DPL commission for at least twenty campaigns: (1) Push Button Millionaire (February 2014-

September 2015); (2) Auto Money App (“AMA”) (June 2014-July 2015); (3) Cash Code (“CC”) 

(June 2014-April 2016); (4) Free Money System (“FMS”) (June 2014); (5) Free Money App 

(June 2014-June 2015); (6) Quick Cash System (June 2014-May 2016); (7) Easy Money 

Machines (June 2014-June 2015); (8) Free Cash (July 2014-October 2015); (9) Secret 

Millionaire Society (October 2014-June 2015); (10) Cash Software (October 2014-December 

2014); (11) Money Platform (January 2015); (12) Push Button Commissions (January 2015-

April 2015); (13) Copy Op (February 2015-May 2015); (14) Copy Trade Profit (April 2015); 

(15) Binary Cash Creator (“BCC”) (May 2014-March 2015); (16) Free Millionaire System (May 

2015); (17) Easy Money Method (May 2015); (18) Fast Cash (October 2015-June 2016); (19) 

Push Money App (“PMA”) (June 2016- October 2016); and (20) Click Money System (“CMS”) 

(October 2016). 

38. Among other things, Fingerhut sent bulk email solicitations designed to entice the 

recipients to click an embedded electronic link in the email that routed the user to AIP’s and 

DPL’s binary options campaign websites, including but not limited to the twenty campaigns 

identified in Paragraph 37. The websites generally included some variation of the campaign 

name like http://automoneyapp.com for AMA or http://fastcash.biz for Fast Cash. 

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39. Fingerhut opened and/or used autoresponders for or on behalf of AIP to send out 

fraudulent email solicitations to hundreds of thousands of prospective customers and customers 

at the same time. 

40. The email solicitations contained an embedded link that directed the prospective 

customers and customers to AIP’s corresponding campaign websites. The websites generally 

contained multiple webpages, including a landing page, members’ page, and registration page. 

The landing pages for AIP’s and DPL’s binary options campaigns all included a sales video 

created or procured by AIP or DPL. 

41. As part of his duties at AIP, Fingerhut tested the links embedded in the 

solicitation emails to ensure that the recipients would be directed to the proper campaign website 

and to make sure that the sales videos streamed automatically once a customer accessed the 

website through the link in the email. In the process, Fingerhut viewed the sales videos. 

42. The binary options solicitations that Fingerhut created and/or disseminated 

advised customers and prospective customers to open and fund a binary options trading account 

with a “recommended broker” so that they could obtain free access to the offered Trading 

System. The solicitations further promised that the Trading Systems activated and began 

accumulating profits automatically once the customers opened and funded their trading account. 

43. Fingerhut admitted that the solicitations he created and/or disseminated on behalf 

of AIP included false or misleading statements as to profit, risk, users’ experience with the 

trading systems, the background and experience of the creators of the trading systems, and 

performance of the trading systems. 

44. The fraudulent solicitations were designed to: (i) capture potential customers’ 

attention; (ii) entice them to enter their personal information on the campaign websites AIP 

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owned or operated; and (iii) click through the funnel to open and fund a trading account with a 

broker that DPL, through Valariola and Barak, directed them to, mainly by promising free access 

to Trading Systems with no risk and guaranteed profits. 

45. In those instances where Fingerhut only disseminated, but did not create AIP’s 

solicitations, he knew that those emails and videos also included false or misleading statements. 

46. Some of the solicitation materials created and/or disseminated by Fingerhut 

explicitly referenced the underlying asset for binary options as commodities like metals, forex, 

and/or swaps. Other solicitations depicted screenshots showing those assets as available to trade 

and/or as having been traded using the marketed Trading Systems. 

47. For example, the Fast Cash sales video that Fingerhut distributed featured actors 

who pretended to be the “creators” of that Trading System who claimed that it had made them 

over $55 million. The video shows a screenshot of one of their purported trading accounts, with 

a pending binary options transaction involving EUR/USD, along with other currency pairings 

displayed in the ticker. Another minute in, the “creators” remind viewers that the clock is 

ticking to take advantage of their offer if they want a “real chance to get hands on software that 

makes big money like this,” and then the video shows a screenshot of the other creator’s account 

with a similar upcoming expiry on the binary options EUR/USD transaction, along with 

reference to other binary option assets that are “hot” including currencies and commodities, 

indices, and stocks. 

48. Other videos, including but not limited to the videos for the Free Money System, 

Cash Code, and Push Money App campaigns, similarly display screenshots of executed binary 

options in forex and reference to commodities as an available asset to trade using the marketed 

Trading System. 

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b. DPL’s Role (October 2013-November 2016) 

49. Between at least October 2013 and November 2016, DPL, through Valariola and 

Barak, and others, willfully aided and abetted AIP’s binary options solicitation scheme, 

including for at least twenty-four (24) fraudulent binary options campaigns, including the twenty 

(20) campaigns in which Fingerhut participated (identified in Paragraph 37, supra), and four (4) 

additional campaigns prior to June 2014: (1) Automated Income App (late 2013/early 2014); (2) 

Golden Goose Method (“GG”) (January 2014-March 2014); (3) Binary Pilot (~February 2014); 

and (4) Rock Star Commissions (March 2014). 

50. Specifically, DPL, through Valariola, Barak and others knew that the binary 

options solicitations AIP created and disseminated included false or misleading statements. For 

example, Valariola procured two sales videos (at least one of which was created by a video 

producer in the United States with a script provided by Valariola), which he gave to AIP for use 

in the GG and Rock Star Commissions binary options campaigns. 

51. The sales video for GG included materially false or misleading statements, 

including where the “creator” of the marketed Trading System repeatedly stresses the ease of 

earning profits automatically by reference to fake results of a fictitious user: 

 “I put $200 in here to start, I fired up the software and took my wife out for breakfast. 

When I got home and checked the account and there was already $390 in it.” 

 “A profit of $4550 streamed into my account [since the day before] while I spent the day 

playing with my wife.” 

52. Valariola and Barak, on behalf of DPL, knew that the sales videos AIP created 

after GG (mostly with the same video producer) that did not come from DPL followed the same 

model and were similarly fabricated by Atkinson or a copywriter. Valariola and Barak also 

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knew that AIP’s solicitations did not reflect real people’s results from use of the marketed 

Trading System that they supplied because they did not provide that information to AIP. 

53. DPL, through Valariola and Barak, and others, also supplied the marketed 

Trading Systems knowing that the systems did not operate as depicted in AIP’s solicitations. 

54. DPL, through Valariola and Barak, served as a liaison with the brokers and 

encouraged brokers to review AIP’s false or misleading solicitations to hone their sales pitch 

when following up on Fingerhut’s and AIP’s leads to increase the number of conversions and 

resulting commissions. 

55. Specifically, DPL, through Valariola, Barak, and DPL’s other agents, officers, 

and employees, worked with brokers to make sure that their sales representatives were ready to 

“convert” prospective customers directed to them through AIP’s marketing campaigns, into 

customers. 

56. For example, before AIP and DPL launched a binary options campaign, Valariola 

disseminated links to the campaign website to the brokers, including brokers in the United 

States, with instructions for them to watch the sales video and try the Trading System “so they’ll 

know how to attack it and get the right bullets” when speaking with potential customers. 

57. Valariola also disseminated to brokers, including brokers in the United States, 

emails from AIP, who he identified as “my partner,” explaining the marketing strategy for the 

binary options campaign. One such email from September 2015 revealed that AIP spent over 

$50,000 on the sales video and used the “best copy writer money can buy (think movie 

scripts/infomercial status).” 

58. DPL, through Valariola and Barak, also managed the broker relationships and 

distributed commissions from the brokers to AIP’s account in the United States. The brokers 

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that DPL selected for AIP’s binary options campaigns, including at least one in the United 

States, agreed to pay a pre-determined, flat commission, generally between $350 and $450 for 

every “first time depositor” (“FTD”) resulting from the campaign solicitations. Brokers also 

generally required a customer to deposit at least $250 to open a trading account in order for a 

customer to qualify as a FTD, but brokers continued soliciting customers to deposit additional 

funds after they opened an account, which is how the brokers benefitted from the relationship. 

Brokers paid DPL and then DPL shared the profits with AIP, or at times brokers paid AIP 

directly at DPL’s direction. 

59. DPL managed the backend operations for the binary options affiliate marketing 

campaigns, including by routing the customers from AIP’s campaign website to the broker 

websites. For example, in February 2014, Barak agreed to send one broker in the United States 

“U.S. traffic, you want to get as much as we can send you starting upcoming Monday.” 

60. DPL also tracked progress of AIP’s campaigns and created and sent AIP weekly 

reports via email that showed leads, customers, traders, conversion rates and AIP’s earnings per 

campaign, among other things. DPL collected commission from the brokers and paid AIP its 

portion of the proceeds in bank accounts in the United States or directed brokers to pay a certain 

amount to AIP directly based on those weekly reports. 

61. DPL also assured brokers, including at least one broker in the United States in 

January 2016, that they would handle all customer issues related to the trading software through 

DPL’s service representatives who would “manage every error, bug, question that users have so 

your sales will not spend any time dealing with that and do what they do best–making them 

deposit.” 

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2. Digital Assets Fraud (October 2016-August 2018)

62. During the Digital Assets Period, Digital Platinum Defendants, through Fingerhut 

and others that he supervised, engaged in a fraudulent solicitation scheme similar to the one 

carried out at AIP, but focused on digital assets instead of binary options. 

63. Specifically, on behalf of the Digital Platinum Defendants, Fingerhut and others 

that he supervised, created and disseminated tens of millions of solicitations that included 

materially false or misleading statements advising prospective customers and/or customers to 

open and fund a digital assets trading account and trade digital assets and/or digital assets 

options (swaps) off-exchange through an unregistered broker using the offered DA Trading 

System, which would purportedly automatically trade digital assets and/or options on digital 

assets automatically on their behalf. The solicitations further advised that the DA Trading 

Systems began accumulating profits right away once the account was funded and set up with just 

a couple of clicks. 

64. Fingerhut did this for at least eleven campaigns during the Digital Assets Period, 

including: (1) Crypto Shield; (2) Bitcoin Code;(3) Ethereum Code; (4) The Crypto Software; (5) 

Symantic Investment App; (6) Crypto Tonics Lab; (7) Bitcoin Trader; (8) Bitcoin Focus Group; 

(9) Crypto Genius; (10) Kryptonex labs; and (11) Bitcoin Loophole. 

65. During the Digital Assets Period, Digital Platinum Defendants, through their 

employees, officers, owners, and agents, including Fingerhut, handled the marketing, broker 

intermediary, and backend roles. Fingerhut managed Digital Platinum Defendants’ affiliate 

marketing program from DPI’s offices in Florida, or by working out of his home in Miami 

Beach, Florida. 

66. Fingerhut hired, directed, and/or supervised at least four individuals in Florida 

and one individual in Israel to write solicitation emails and disseminate them in bulk through 

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autoresponders that he and others he supervised created for the digital assets campaigns. Just 

like his binary options activities for AIP, when Fingerhut wrote digital assets solicitation emails, 

he fabricated profits and performance results based on fictional accounts of fictitious characters’ 

use of the DA Trading System that was marketed; Fingerhut directed those that he supervised to 

do the same. 

67. DPL and Huf, through Valariola, Barak, and others acting on their behalf, 

managed the backend, supplied the marketed DA Trading Systems, worked directly with the 

brokers, tracked progress of the campaigns and handled payments to DPI and its employees and 

agents, including Fingerhut. 

68. Digital Platinum Defendants’ digital assets campaigns operated the same way as 

the previous binary options campaigns at AIP. Fingerhut and others that he supervised created 

and/or disseminated mass email solicitations using autoresponders. Those emails included an 

embedded link that directed anyone who clicked it to the corresponding digital assets campaign 

website operated by DPL and/or Huf through an affiliate network controlled by Valariola and 

Barak called Roi Boutique. Upon arrival at the landing page for each campaign, a sales video 

automatically played to further persuade a prospective customer and/or customer to open and 

fund a digital assets trading account. 

69. Fingerhut and others he supervised used more than ten autoresponders on behalf 

of Digital Platinum Defendants during the Digital Assets Period. On average, five auto 

responders were used on a daily basis and, on average, each autoresponder contained around 

two-hundred thousand (200,000) email addresses obtained by Digital Platinum Defendants and 

used as leads for their digital assets solicitation campaigns. 

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70. Digital Platinum Defendants’ websites generally included some variation of the 

campaign name like http://thecryptosofware.co/ for the Crypto Software campaign or 

http://ethereumcode.net/index.php for the Ethereum Code campaign. 

71. The landing pages for Digital Platinum Defendants’ digital assets campaigns all 

included a sales video that streamed automatically. As part of his duties, Fingerhut tested the 

links embedded in the solicitation emails to ensure that the recipients would be directed to the 

proper campaign website and to make sure that the sales videos streamed automatically once a 

customer accessed the website. In doing so, Fingerhut viewed the sales videos. 

72. Brokers selected by DPL and/or Huf for the digital assets campaigns agreed to 

pay a pre-determined, flat commission resulting from each new customer that opened and funded 

a digital assets trading account (“FTD”) as a result of Digital Platinum Defendants’ solicitations. 

Brokers also generally required a customer to deposit at least $250 to open a trading account and 

qualify as a FTD. 

3. Defendants’ False or Misleading Solicitations 

a. AIP’s Fraudulent Binary Options Solicitations 

73. AIP, through Fingerhut and others, intentionally or recklessly created and/or 

procured false or misleading email solicitations and follow-ups (known as “swipes”) and sales 

videos for each of the binary options campaigns that it launched with DPL’s assistance. 

74. As described above, DPL, through Valariola and Barak, knew or willfully 

disregarded that the swipes and sales videos that AIP created and disseminated for its binary 

options campaigns included false or misleading information about the Trading System and 

purported users’ experiences with and profits resulting from the Trading System, particularly 

since DPL did not share results of any Trading System with AIP for AIP to include in its 

solicitations. 

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75. The swipes created and/or disseminated by Fingerhut contained numerous false or 

misleading statements about the advertised Trading Systems, e.g., that customers can and have 

already “made millions” trading with the Trading Systems, or that customers made hundreds in 

profits in seconds, thousands in a day, and became millionaires in a few months. AIP’s swipes 

prior to June 2014 included the same false or misleading statements about the Trading Systems. 

76. When Fingerhut wrote swipes for AIP, he made up profits and performance 

results instead of referring to real users’ experiences with the marketed Trading Systems. 

Fingerhut also created the appearance of fake urgency in the solicitation emails by stressing that 

spots are limited (“Only 50 people around the world are accepted each month”) or “time is 

running out” and “this download link expires in 24 hours.” Prior to June 2014, others at AIP 

similarly included fake profits, performance results, and false urgency in the swipes. 

77. Fingerhut knew that the swipes prepared by others for AIP also included 

materially false or misleading information about profits, trading results, background and 

experience of the creators of the Trading Systems, and/or purported users’ experience with the 

Trading Systems. 

78. Even though Fingerhut and others at AIP sent the swipes to prospective 

customers and customers, those emails often appeared as though the fictional character(s) who 

were depicted in the corresponding sales video sent the communications. In other instances, the 

emails appeared to come from the fake owner or support department of the advertised Trading 

System so the solicitation looked more persuasive and credible. 

79. For example, Fingerhut worked on the Push Money App (“PMA”) campaign by 

creating and disseminating false or misleading email solicitations and testing the link to the sales 

video. The following swipe from on or about February 23, 2016 exemplifies solicitations 

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Fingerhut and others at AIP disseminated for the PMA campaign, which references a fake “PMA 

company” and was signed by fake founders of the fake PMA company: 

We have just closed a special deal with one of our major brokers. Everyone 

that registers their PMA App today gets a matching deposit bonus . . . up to 

$10k if you’re so fortunate . . . Just in the past 24 hrs the PM App has made the 

new members a combined $118,927.36. Just in the last 24hrs! My friend, you 

are missing out on serious money if you haven’t activated your app yet. I know 

last year you were scammed with Binary Options bots. Trust me, this is not one 

of those scams. Not even close. PMA Company received the Most Profitable 

Trading System award at the NY convention of 2015. Yes we are a real legit 

company that really wants to help you become filthy rich. 

There were no new members who earned over $118,000 in 24 hours, no 2015 convention, and 

there was never a company called PMA Company. Fingerhut knew that the trading results of 

purported users in the PMA emails were fake. 

80. In May 2016, AIP, through Fingerhut and others, sent various emails to a disabled 

veteran in the United States living on disability payments, reminding the recipient to fund a 

trading account “to make possibly 7 figures in 180 days just like our first group of beta testers!” 

One email stressed the “limited availability” of PMA and urged that customer to fund his 

account “so you’ll be able to start making money right away.” These emails included fake 

trading profits and false time and availability restrictions, all of which Fingerhut knew was 

regularly included in AIP’s solicitations despite the fact that the information was not true. 

81. In addition to false statements in the email solicitations Fingerhut created or 

disseminated, Fingerhut knew that all of the binary options campaign websites featured at least 

one sales video that depicted a fictional story about a Trading System portrayed by paid actors 

representing fictional characters making false or misleading statements about the Trading 

System’s trading results, risk of loss, experience of the founders, and profits earned. The videos 

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also included props like luxury vehicles, a private jet, and mansions–all rented to create the 

video and not in fact owned or purchased by any user of the advertised Trading System. 

82. Fingerhut knew that the stories depicted in AIP’s sales videos were fabricated by 

Atkinson or a copywriter and did not reflect real people’s results from use of the marketed 

Trading Systems. 

83. In fact, none of AIP’s binary options sales videos involved real users or creators 

of the advertised Trading System. As scripted, and as Fingerhut knew, the actors brazenly lied 

in the videos about their role and the fictional story line. For example, the SMS video included 

the following false statements delivered by an actor: 

See anyone can throw numbers around and whip up some proof shots. All the 

scamers [sic] do it. This isn’t that. This is a completely different playing 

field. And you’re going to see real proof . . . you can’t deny . . . and . . . in a 

way you’ve never seen before in your life. 

Everything I’m about to tell you is 100% real and was experienced by me 

firsthand. 

All of these statements were fabricated. 

84. Historical and/or live trading results depicted in AIP’s sales videos were also 

fake. For example, the sales video for CC portrays “Robert Allen” as the star. Allen, a doctor, 

apparently received the CC System from a “true billionaire” and “financial mogul” on his 

deathbed after Allen cared for him in the hospital. The sales video shows screenshots of Allen’s 

trading account from July 2009 through August 2009 and also a “live” video of the account with 

big red letters across the screen, “LIVE ONLINE PROOF.” Allen explains that he “just” 

deposited $250 “risk-free” into his account and he will “show you the money it makes LIVE 

over the next 60 seconds. We can back up every word we say with real life results.” The sales 

video shows the account increasing nine times then settling at $356,910 in the span of one 

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minute. However, Robert Allen was a fictional character portrayed by an actor, there was no 

billionaire mogul creator, and Allen had no trading account from 2009 or any trading profits 

from the CC System. 

85. AIP’s sales videos also purported to guarantee profits by using the “risk-free” 

Trading System: 

The AMA campaign promised: 

In sum total . . . we know . . . you will be earning at least $300,000 per month–

also known as . . . $3.6 million dollars per year . . . starting just 30 days from 

now . . . just as sure as 1 plus 1 equals 2. Gosh, I love numbers! These are 

mathematical certainties . . . . 

The Auto Money App only picks winning trades . . . . These brokers only 

work for the Auto Money App and they are designed to make sure your initial 

deposit turns you into a millionaire in 90 days or less. 

SMS includes: 

And when you do get to the end of this video, you will also be rewarded with a 

guaranteed $1000 in your first 60 seconds and $10,000 in your first two days 

for free . . . . There will be no losses. None at all. 

b. Fingerhut’s & Digital Platinum Defendants’ Digital Assets 

Fraudulent Solicitations 

86. Digital Platinum Defendants, through Fingerhut and others at his direction, 

intentionally or recklessly created and/or procured false or misleading swipes for each of its 

digital assets campaigns during the Digital Assets Period. 

87. The swipes created and/or disseminated by Fingerhut and others that he 

supervised, contained numerous false or misleading statements about the advertised DA Trading 

Systems. 

88. Fingerhut’s swipes generally referred to the digital assets involved, most often 

Bitcoin, and explained that the DA Trading System resulted in profits regardless of what 

happened to the price of Bitcoin and without the customer needing to purchase any Bitcoin. The 

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sales videos further showed screenshots of executed transactions that purported to reflect trading 

in digital assets and also options (swaps) involving digital assets. 

89. Fingerhut admitted that when he wrote swipes, he fabricated profits and 

performance results instead of referring to real users’ experiences with the marketed DA Trading 

Systems. He also instructed the individuals he supervised to do the same and/or he provided the 

content for them to disseminate (as was the case with the Israeli employee who reported to 

Fingerhut). Fingerhut, and others under his supervision, also created the fake appearance of 

urgency in the solicitation emails by stressing that spots are limited (e.g., “this new members’ 

group is limited to only 100 new members”). 

90. Fingerhut further admitted that all the emails/swipes he wrote or that others under 

his supervision wrote for Digital Platinum Defendants were based on fictional accounts of 

fictitious characters’ use of the offered DA Trading System. Fingerhut boasted to Passerino that 

the swipes that were most successful in persuading individuals to open and fund digital assets 

trading accounts were the ones he created. 

91. For example, in or around November 2017, Fingerhut directed an agent or 

employee of DPI to disseminate email solicitations for Digital Platinum Defendants’ Bitcoin 

Code campaign, while intentionally or recklessly disregarding that they included the following 

materially false or misleading statements: 

Kelly Jones writes about this system that delivers huge gains no matter what 

the price [of Bitcoin] does. 

You see, there is a system that will deliver results no matter how high or low 

Bitcoin goes . . . . I estimate that if you start now in a month you can be sitting 

on at least $20K. Yes, it is a high number but that is what I took in after a 

month of using this system. 

Here’s what is about to happen the second you activate your auto-generating 

profit account. There is [sic] over 1,000 people just like you using this system 

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every single day earning thousands in profits. And don’t be 

intimidated . . . . Because you do NOT need any previous experience or any 

tech skills. The system does 100% everything for you. It is so easy to make 

money from this anyone can do it including you . . . . You start right now, by 

this time tomorrow you will have the money already in your account ready to 

be spent. Yes, it works that fast . . . . 

92. All of these statements concerning profits and users’ experience with the DA 

Trading System were fictitious in that they were not based on actual performance of the system 

or any real person’s profits resulting from same. 

93. Similarly, the swipes Fingerhut and/or his team created and used for another 

Digital Platinum Defendants’ Bitcoin campaign included the following materially false or 

misleading statements: 

Had you started using our system just one month you’d be sitting on a 

minimum of $400,000 in profit. Isn’t it amazing. 

But thanks to our revolutionary system, you can profit with bitcoin with zero 

risk. 

I would take action fast as this new members group is limited to only a hundred 

new members who want too fast track their success. 

As of right now our system has created 2903 first time millionaires in 2017 

with nine more members about five days away from hitting the millionaire 

mark! . . . . Recently we reopened the enrollment and everyone who joins in 

2017 we can guarantee you’ll become a millionaire in 2018 

[Y]ou have come this far in the process and have been given a spot to join our 

team, let me remind you each of our members is earning $13,000 per day or 

more. 

[Y]ou activate your account now within exactly 24 hours your payout will be at 

least 13,000 period. Every single day you will receive this amount or 

more . . . . 

94. Fingerhut knew that all of the statements in this swipe were fictitious in that they 

were not based on real users’ experience with the marketed DA Trading System and there was 

no basis to include the “guarantee” of profits. 

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95. The swipes Fingerhut and his team created and used for the Crypto Software 

(//thecryptosoftware.co/) digital assets campaign in or around January 2018 included the 

following materially false or misleading statements: 

[I]t only took 29 days for the last 23 people who joined to start getting daily 

gains over $20,000. 

Mark my words . . . you will NEVER get the gains you get from the system I 

am about to show you. There is no way you can earn 13K a day by buying 

coins. The number above is exactly how much you will gain each day by using 

my system. Plus it requires no experience and can be generating big profits for 

you automatically. 

All of the statements in this swipe were similarly fictitious. 

96. Fingerhut included all of the materially false or misleading statements in the 

swipes (or directed others to do so) disseminated on behalf of Digital Platinum Defendants to 

induce prospective customers to sign up so that he and the Digital Platinum Defendants could 

earn compensation and/or commissions. 

97. Fingerhut’s email solicitations for all of Digital Platinum Defendants’ digital 

assets campaigns included an embedded link to the campaign websites, which each featured an 

automatically streaming sales video that depicted a fictional story about a DA Trading System 

portrayed by paid actors representing fictional characters making false or misleading statements 

about the system’s trading results, risk of loss, experience of the founders, and profits earned. 

98. Fingerhut viewed Digital Platinum Defendants’ sales videos as part of the process 

of testing the links in the solicitation emails. Fingerhut knew that the stories depicted in the 

digital assets sales videos were fabricated and did not reflect real people’s results from use of the 

marketed DATrading System. 

99. For example, the Bitcoin Code sales video described how “anyone can make an 

excess of $13,000 in just 24 hours” using the software that trades Bitcoin without buying it with 

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“an unheard of 99.4% accuracy, which means it’s virtually impossible to lose.” The video 

shows fake “LIVE” demonstrations that include screen shots of 126 executed options 

transactions, which resulted in only 3 losses. The video also includes three fictitious 

testimonials, one of which claimed to have earned $400,000 using the DA Trading System in 

thirty-seven days, another claiming to have earned over $750,000 in two months. 

C. Defendants Scammed Tens of Thousands of Individuals 

100. Tens of millions of individuals received AIP’s and Digital Platinum Defendants’ 

fraudulent solicitations and the fraudulent campaigns were successful. 

101. For example, during a portion of the Binary Options Period, between January 

2014 and June 2016, at least 51,917 new customers, some of which were US customers, opened 

and funded binary options trading accounts at brokers in connection with fraudulent campaigns 

that DPL aided and abetted; at least 42,945 of those customers opened and funded binary options 

trading accounts in connection with fraudulent campaigns that Fingerhut participated in from 

June 2014 to June 2016. 

102. During the Digital Assets Period, at least 8,043 customers opened and funded 

digital assets or digital assets options trading accounts at brokers in connection with Digital 

Platinum Defendants’ fraudulent campaigns that Fingerhut participated in. 

103. The amount of money customers deposited when opening a new account varied. 

For the binary options and digital assets campaigns, customers were generally required to 

deposit at least $250 initially. Therefore, the 51,917 customers that opened new binary options 

trading accounts at brokers between January 2014 and June 2016 deposited at least $12,979,250 

in trading accounts as a result of AIP’s fraudulent solicitations. Similarly, the 8,043 customers 

that opened new digital assets trading accounts between October 2016 and August 2018 

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deposited at least $2,010,772.95 as a result of Digital Platinum Defendants’ fraudulent 

solicitations. 

104. Brokers paid DPL and AIP a flat commission for each new funded binary option 

account opened as a result of AIP’s fraudulent solicitations and DPL and AIP split the 

commission between them. Between October 2013 and November 2016, DPL paid AIP 

$17,300,780.50 for the binary options campaigns they launched together. AIP deposited over 

$154,956 into Fingerhut Group’s bank account for Fingerhut’s services during the Binary 

Options Period. 

105. Between October 2016 and August 2018, DPI received $3,619,391.31 in 

payments for its digital assets affiliate marketing activities, primarily from an account in the 

name of Huf. The money deposited in a United States account in DPI’s name represents only a 

portion of the commissions DPL and/or Huf earned as a result of DPI’s fraudulent solicitations. 

106. During the Digital Assets Period, Fingerhut invoiced DPL, DPI, and Huf for the 

affiliate marketing services he provided in connection with digital assets campaign and those 

entities generally paid him through Fingerhut Group and/or Media Hut. Fingerhut received at 

least $383,269.98 during the Digital assets Period from accounts in the name of DPL, DPI, and 

Huf. Fingerhut’s compensation included a fixed base salary and since at least July 2017, he also 

received approximately two percent (2%) of the commissions resulting from his (and his team’s) 

fraudulent solicitations. 

107. In the spring and summer of 2018, Fingerhut orchestrated a number of financial 

transactions among entities he owned and controlled, including Fingerhut Group, Recruiting 

Hut, and Media Hut. On June 29, 2018, Fingerhut withdrew the remaining balance in the 

Fingerhut Group account, approximately $250,000, and transferred the funds to his Recruiting 

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Hut account. Fingerhut closed the Fingerhut Group account in July 2018 and used funds from 

the Recruiting Hut account to pay off his mortgage in July 2018. 

D. Fingerhut’s Materially False or Misleading Statements to the Commission 

and Under Oath 

108. On August 9, 2018, Staff sent via UPS an investigative subpoena and letters to 

Fingerhut and his companies requesting that they retain, preserve, and safeguard against 

destruction of all documents, communications and information related to the binary options and 

digital assets fraud alleged here (“DND”). The package also included a copy of the form 

Statement to Persons Providing Information About Themselves to the Commission (“Statement to 

Persons”), which advises parties of their duty to speak truthfully and potential penalties for 

failing to do so. 

109. Staff spoke with Fingerhut on a voluntary basis via telephone twice in August 

2018 and once in September 2018. Fingerhut was not represented by counsel at those times. As 

is Staff’s practice, before discussing any substantive matters, Staff advised Fingerhut of the ways 

in which the Commission may use information provided to it, and that if he chose to speak with 

Staff voluntarily, all statements must be truthful as there could be criminal and civil penalties for 

making false or misleading statements to Staff. Fingerhut acknowledged Staff’s warnings and 

agreed to speak on a voluntary basis claiming that he wanted to cooperate. 

110. After speaking with Fingerhut on August 20, 2018, Staff re-sent its original 

subpoena and DNDs dated August 9 to Fingerhut, Fingerhut Group, and Media Hut via email, 

attaching a copy of the Division’s Statement to Persons, which memorialized the warnings Staff 

conveyed orally at the outset of the telephone conversation. Fingerhut confirmed receipt on 

August 21, 2018 via email. 

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111. During the telephone conversations with Staff, Fingerhut provided information 

about AIP, the Digital Platinum Defendants, and his role with those companies. Fingerhut also 

agreed to prepare and sign a declaration that Staff could use during litigation in support of its 

Motion for a Preliminary Injunction in the Atkinson case. 

112. Fingerhut executed a declaration under penalty of perjury that Staff used as 

evidence in its filing in September 2018. In October 2018, Fingerhut testified as a witness for 

Staff during the subsequent preliminary injunction hearing. Atkinson, No. 18-cv-23992-JEM, at 

ECF Nos. 65, 103.2. 

113. The Division deposed Fingerhut in connection with the Atkinson litigation on 

May 22, 2019. Fingerhut testified that he understood that his testimony and declaration were 

made under oath. 

1. Use & Deletion of Fingerhut’s Personal Email Accounts 

114. Fingerhut told Staff during telephone conversations on August 20, 21, 2018 and 

September 20, 2018, and later testified under oath, that the only email address he used to conduct 

business for Digital Platinum Defendants was dan@digitalplatinum.com. 

115. During Fingerhut’s deposition in connection with the Atkinson litigation in May 

2019, Fingerhut repeated the assertion several times. He was asked, and he responded: 

Q. Okay. So you didn’t use any other email addresses while at Digital 

Platinum; right? 

A. No. 

Q. Or related to Digital Platinum work? 

A. No. 

116. However, Fingerhut routinely used his personal Gmail account for business 

related to Digital Platinum Defendants, including to provide instructions to individuals he 

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supervised about email solicitations for digital assets campaigns, send and view Google Docs 

that contained email solicitations for digital assets campaigns, and to access solicitation materials 

in Dropbox. In fact, it was Fingerhut’s practice to ensure that a copy of Digital Platinum 

Defendants’ email solicitations would be sent to his Gmail address during the Digital Assets 

Period. 

117. Fingerhut failed to disclose, search or produce any documents from that Gmail 

account in response to the investigative and judicial subpoenas directed to him. 

118. On or about August 23, 2018, after speaking with Staff, receiving an investigative 

subpoena and DND letters, and after Passerino notified him that DPI received a subpoena from 

the CFTC that named Fingerhut, Fingerhut deleted and/or deactivated his personal Gmail 

account. During his May 22, 2019 deposition, Fingerhut denied any recollection of deleting or 

deactivating that account. 

119. Fingerhut admitted, however, that in early 2019 he deleted a Hotmail account that 

he used to conduct business at AIP and Digital Platinum Defendants. Fingerhut did so at least 

five months after receiving the August 2018 investigative subpoena and DNDs and at least three 

months after receiving a judicial subpoena in October 2018. 

120. In response to those subpoenas, Fingerhut produced only a handful of documents 

from the Hotmail account related to AIP business. However, Fingerhut sent or received 

hundreds of emails related to AIP’s and DPL’s binary options or Digital Platinum Defendants’ 

digital assets affiliate marketing from his Hotmail account, all of which were relevant to the 

August 2018 investigative subpoena and October 2018 judicial subpoena. 

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2. Fingerhut’s Direct & Integral Role in Digital Platinum Defendants’ Fraud 

121. Fingerhut made false or misleading statements to Staff and in his sworn 

declaration to conceal the nature and extent of his integral role in Digital Platinum Defendants’ 

digital assets fraud and production of documents showing same. 

122. During telephone conversations with Staff, Fingerhut described his role related to 

trading or digital assets email solicitations at DPI as low-level, merely reporting to and following 

instructions from Passerino. 

123. In his sworn declaration, Fingerhut averred that although he participated in hiring 

certain individuals to work at DPI, none of those individuals were involved in creating or 

disseminating solicitations for campaigns related to trading or digital assets: “Those individuals 

were hired to develop and design an email marketing system and an interactive sports game app 

for the NBA/WNBA.” 

124. During Fingerhut’s deposition, Fingerhut confirmed (until confronted with 

contradictory evidence) that this statement was true and accurate and went even further: 

Q. Did you hire anyone that was involved in writing swipes? 

A. No. 

Q. Okay. Did you hire anyone who was involved in sending out emails 

through auto responders for CFD or virtual currency or any other trading 

campaigns? 

A. No. 

125. However, Fingerhut did in fact recruit, hire, train, and supervise individuals on 

behalf of the Digital Platinum Defendants to assist him with writing swipes and sending out 

emails solicitations through autoresponders for digital assets and other trading campaigns. 

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3. Fingerhut’s Laptop 

126. Fingerhut testified at the Atkinson PI hearing that he quit his job at DPI on his 

birthday in 2018 and gave the laptop computer that he used for DPI business to Passerino that 

same day by handing it to Passerino at Fingerhut’s home. Atkinson, No. 18-cv-23992-JEM, at 

ECF Nos. 103.2, 136.1. 

127. Passerino failed to turn over the laptop to the appointed receiver or Staff as 

ordered by the Court during the Atkinson litigation. Relying on Fingerhut’s testimony regarding 

the laptop, Staff filed a Motion for Rule to Show Cause (“RTSC”) why Passerino should not be 

held in contempt for failing to produce the laptop, among other things, on October 30, 2018. Id. 

at ECF No. 103. As part of the RTSC proceedings, the CFTC identified, among other things, 

“Dan Fingerhut’s computer which, according to Mr. Fingerhut’s uncontroverted testimony, he 

personally handed to Passerino, along with all the username and password information to access 

therein, on August 13, 2018.” Id. at ECF No. 130 at 7-8, ECF 210 at ¶ 4. 

128. Passerino thereafter produced documents and provided information to Staff 

contradicting Fingerhut’s statements. Staff engaged in additional discovery and discovered that 

the laptop was purchased by Fingerhut and not DPI, Passerino was not at Fingerhut’s home on 

his birthday in 2018, Fingerhut did not give his laptop to Passerino at his home on his birthday in 

2018 or at any other time, Fingerhut had his laptop after he spoke with the CFTC (also after his 

birthday in 2018), and Fingerhut also used a desktop at his home and his cell phone to conduct 

Digital Platinum Defendants’ business, which he had omitted from discussions with the Division 

and which he failed to produce. 

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129. When Passerino met with Fingerhut at his home after his birthday in 2018 and 

notified him that the CFTC issued a subpoena directed at DPI that identified Fingerhut, 

Fingerhut responded by saying that he would go on his boat and throw his laptop into the ocean. 

130. During his deposition, Fingerhut repeated his false statement that he handed the 

laptop he used while working at Digital Platinum Defendants to Passerino when he quit DPI on 

his birthday in 2018. 

VI. VIOLATIONS OF THE COMMODITY EXCHANGE ACT AND REGULATIONS 

COUNT I 

Fingerhut’s, DPL’s, Valariola’s and Barak’s Violations of Section 4c(b) of the 

Act, 7 U.S.C. § 6c(b) (2018), and Regulation 32.4, 17 C.F.R. § 32.4 (2019) 

(Options Fraud) 

131. 7 U.S.C. § 6c(b) makes it unlawful for any person to offer to enter into, enter into, 

or confirm the execution of, any transaction involving any commodity regulated under the Act 

which is of the character of, or is commonly known to the trade as, inter alia, an “option”, “bid”, 

“offer”, “put”, or “call”, contrary to any rule, regulation, or order of the Commission prohibiting 

any such transaction or allowing any such transaction under such terms and conditions as the 

Commission shall prescribe. 

132. 17 C.F.R. § 32.4 provides that, in or in connection with an offer to enter into, the 

entry into, or the confirmation of the execution of, any commodity option transaction, it shall be 

unlawful for any person directly or indirectly: (a) to cheat or defraud or attempt to cheat or 

defraud any other person; (b) to make or cause to be made to any other person any false report or 

statement thereof or cause to be entered for any person any false record thereof; or (c) to deceive 

or attempt to deceive any other person by any means whatsoever. 

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133. As set forth in paragraphs 2-4, 6, 16, 26, 36-48, 73, 75-85, 100-101, and 103-04, 

between June 2014 and October 2016, Fingerhut, as an agent of AIP, intentionally or recklessly 

created and/or disseminated fraudulent solicitations in emails, websites, and fictitious sales 

videos promising free access to Trading Systems to induce prospective customers to open and 

fund a binary options trading account with a recommended broker so that AIP could earn 

commissions for twenty binary options campaigns. 

134. Between June 2014 and October 2016, Fingerhut, by the conduct alleged in 

paragraphs 2-4, 6, 16, 26, 36-48, 73, 75-85, 100-101, and 103-04, in or in connection with an 

offer to enter into, the entry into, or the confirmation of the execution of, any commodity option 

transaction directly or indirectly: (a) cheated or defrauded, and attempted to cheat and defraud, 

customers and prospective customers; (b) made or caused to be made to customers and 

prospective customers false reports or statements; and (c) deceived or attempted to deceive 

customers and prospective customers, in violation of 7 U.S.C. § 6c(b) and 17 C.F.R. § 32.4. 

135. As set forth in paragraphs 1-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-104, between October 2013 and November 2016, AIP, through the acts of its owners, 

employees, agents, and/or employees, including Fingerhut’s acts between June 2014 and 

October 2016, intentionally or recklessly created and/or disseminated fraudulent solicitations in 

emails, websites, and fictitious sales videos promising free access to Trading Systems to induce 

prospective customers to open and fund a binary options trading account with a recommended 

broker so that AIP could earn commissions for twenty-four campaigns. 

136. As set forth in paragraphs 1-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-104, between at least October 2013 and November 2016, AIP, through the acts of its 

owners, employees, agents, and/or employees, including Fingerhut’s acts between June 2014 and 

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October 2016, in or in connection with an offer to enter into, the entry into, or the confirmation 

of the execution of, any commodity option transaction directly or indirectly: (a) cheated or 

defrauded, and attempted to cheat and defraud, customers and prospective customers; (b) made 

or caused to be made to customers and prospective customers false reports or statements; and (c) 

deceived or attempted to deceive customers and prospective customers, in violation of 7 U.S.C. 

§ 6c(b) and 17 C.F.R. § 32.4. 

137. As set forth in paragraphs 1-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-104, AIP violated 7 U.S.C. § 6c(b) and 17 C.F.R. § 32.4 through the acts of its owners, 

officers, agents, and/or employees, including Fingerhut’s acts between June 2014 and October 

2016, because Fingerhut’s conduct was within the scope of his employment, office or agency 

with AIP. AIP is therefore liable for Fingerhut’s acts, omissions, and failures constituting 

violations of 7 U.S.C. § 6c(b) and 17 C.F.R. § 32.4 pursuant to Section 2(a)(1)(B) of the Act, 

7 U.S.C. § 2(a)(1)(B), and Regulation 1.2, 17 C.F.R. § 1.2 (2019). 

138. As set forth in paragraphs 2-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-04, between October 2013 and November 2016, DPL, through Valariola and Barak, 

willfully aided and abetted AIP’s twenty-four fraudulent binary options campaigns by supplying 

certain false sales videos, knowing AIP used similar false or misleading statements in video and 

email solicitations that it created and disseminated to prospective customers, sharing those 

solicitations with brokers and encouraging them to use them in the brokers’ further solicitations, 

serving as an intermediary with the brokers, supplying the Trading Systems that did not operate 

as marketed, and handling the commissions resulting from the fraud. Therefore, pursuant to 

Section 13(a) of the Act, 7 U.S.C. § 13c(a) (2016), DPL is liable for AIP’s violations of 7 U.S.C. 

§ 6c(b) and 17 C.F.R. § 32.4. 

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139. As set forth in paragraphs 2-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-04, between October 2013 and November 2016, Valariola and Barak willfully aided and 

abetted AIP’s violations of 7 U.S.C. § 6c(b) and 17 C.F.R. § 32.4 within the scope of their 

employment, office or agency with DPL. DPL is therefore liable for Valariola’s and Barak’s 

acts, omissions, and failures constituting violations of 7 U.S.C. § 6c(b) and 17 C.F.R. § 32.4 

pursuant to 7 U.S.C. § 2(a)(1)(B) and 17 C.F.R. §1.2. 

140. As set forth in paragraphs 2-4, 6, 19-24, 49-61, 74, and 104, Valariola and Barak 

controlled DPL throughout the relevant period, including between October 2013 and November 

2016. Valariola and Barak failed to act in good faith and/or knowingly induced DPL’s violations 

alleged herein. Valariola and Barak are therefore liable for DPL’s violations as controlling 

persons pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b) (2018). 

141. Each solicitation offering automated trading software that purported to trade 

binary options automatically on behalf of customers is alleged as a separate and distinct violation 

of 7 U.S.C. § 6c(b) and 17 C.F.R. § 32.4. 

COUNT II 

Fingerhut’s Violations of Section 4o(1) of the Act, 7 U.S.C. § 6o(1) (2018) 

(CTA Fraud) 

142. Section 1a(12)(A) of the Act, 7 U.S.C. § 1a(12)(A) (2018), in relevant part, 

defines a CTA as any person who “for compensation or profit, engages in the business of 

advising others, either directly or through publications, writings, or electronic media, as to the 

value of or advisability of trading in” any commodity for future delivery, security futures 

product, swap, and/or commodity option. 

143. Between October 2013 and November 2016, AIP acted as an unregistered CTA 

by advising others through email and video solicitations as to the value and advisability of 

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trading in binary options to earn commission from recommended brokers using automated 

trading systems as set forth in Paragraphs 1-4, 6, 16, 26-27, 36-61, 73, 75-85, 100-101, and 103-

04. 

144. Regulation 1.3(Associated Person)(4), 17 C.F.R. § 1.3(Associated Person)(4) 

(2019), in relevant part, defines an Associated Person of a CTA to include an employee or agent 

of a CTA that is involved in the solicitation of a client’s or a prospective client’s discretionary 

account. 

145. As set forth in paragraphs 2-4, 6, 16, 26-27, 36-48, 73, 75-85, 100-101, and 103-

04, Fingerhut acted as an unregistered Associated Person of a CTA between June 2014 and 

October 2016 because, as an employee or agent of AIP, he created and/or disseminated 

solicitations to clients and prospective clients that advised them to: (i) trade in binary options; 

(ii) with a recommended broker; (iii) using automated trading software that would trade 

automatically on their behalf; (iv) for compensation. 

146. 7 U.S.C. § 6o(1) makes it unlawful for a CTA or Associated Person of a CTA, 

using the instrumentalities of interstate commerce, directly or indirectly: 

(A) to employ any device, scheme, or artifice to defraud any 

client or participant or prospective client or participant; or 

(B) to engage in any transaction, practice or course of business 

which operates as a fraud or deceit upon any client or participant 

or prospective client or participant. 

147. As set forth in paragraphs 2-4, 6, 16, 36-48, 73, 75-85, and 100-101, Fingerhut 

fraudulently solicited members of the public and created and/or disseminated fraudulent websites 

and emails advising members of the public to open and fund binary options trading accounts 

with a recommended broker to access the marketed Trading Systems that purported to trade 

automatically on behalf of the client automatically. For each of AIP’s binary options campaigns, 

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including but not limited to the twenty (20) AIP launched that Fingerhut was involved with, the 

solicitations repeatedly misrepresented, among other things: (i) hypothetical and fictitious 

trading results as real results; (ii) actors as true users of the Trading Systems; (iii) the fictitious 

experience, background and skill of the “creators” of the Trading Systems; and/or (iv) that the 

testimonials reflected real users’ experiences. 

148. Between June 2014 and October 2016, Fingerhut, by the conduct alleged in 

paragraphs 2-4, 6, 16, 36-48, 73, 75-85, 100-101, and 103-104, while acting as an AP of a CTA, 

used the instrumentalities of interstate commerce and: (a) employed numerous devices, 

schemes, or artifices to defraud clients and prospective clients; and (b) engaged in transactions, 

practices, and courses of business which operated as a fraud or deceit upon clients and 

prospective clients, in violation of 7 U.S.C. § 6o(1). 

149. Each solicitation offering automated trading software that purported to trade 

binary options automatically on behalf of customers is alleged as a separate and distinct violation 

of 7 U.S.C. § 6o(1). 

COUNT III 

Fingerhut’s and Digital Platinum Defendants’ Violations of Section 6(c)(1) of the 

Act,7 U.S.C. § 9(1) (2018), and Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3) (2019) 

(Manipulative & Deceptive Device, Scheme or Artifice) 

150. Section 1a(47)(A) of the Act, 7 U.S.C. § 1a(47)(A) (2018), defines “swap” to 

include, among other things, any agreement, contract, or transaction that: (a) is an option of any 

kind; (b) provides for payment dependent on the occurrence, nonoccurrence, or the extent of the 

occurrence of an event or contingency; or (c) provides on an executory basis for payments based 

on the value or level of one or more interest or other rates, currencies, commodities, securities, 

instruments of indebtedness, indices, quantitative measures, or other financial or economic 

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interests or properly of any kind, without also conveying an ownership interest in any asset or 

liability. 

151. During the Binary Options Period (October 2013-November 2016), AIP, through 

its owners, officers, employees, and/or agents, including Fingerhut during the period of June 

2014 to October 2016, engaged in a fraudulent binary options scheme which offered free access 

to Trading Systems, which in turn traded binary options (swaps under the definition in the Act). 

DPL willfully aided and abetted twenty-four (24) of those campaigns and Fingerhut participated 

in twenty (20) between June 2014 and October 2016. 

152. During the Digital Assets Period (October 2016-August 2018), Fingerhut and 

Digital Platinum Defendants, through the acts of Valariola, Barak, Fingerhut, and other owners, 

officers, employees, and/or agents of Digital Platinum Defendants, engaged in eleven (11) 

fraudulent digital assets campaigns which marketed free access to DA Trading Systems, which 

in turn, traded digital assets, a commodity in interstate commerce under the Act, and options on 

digital assets, a swap under the Act. 

153. 7 U.S.C. § 9(1) provides, in relevant part, “[i]t shall be unlawful for any person, 

directly or indirectly, to use or employ or attempt to use or employ, in connection with any swap, 

or a contract of sale of any commodity in interstate commerce, or for future delivery on or 

subject to the rules of any registered entity, any manipulative or deceptive device or contrivance, 

in contravention of such rules and regulations as the as the Commission shall promulgate . . .” 

154. 17 C.F.R. § 180.1(a)(1)-(3) provides, in relevant part, that it shall be unlawful for 

any person, in directly or indirectly: 

In connection with any swap, or contract of sale of any commodity in 

interstate commerce, or contract for future delivery on or subject to the 

rules of any registered entity, to intentionally or recklessly: (1) Use or 

employ, or attempt to use or employ, any manipulative device, scheme, or 

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artifice to defraud; (2) Make, or attempt to make, any untrue or misleading 

statement of materials fact or to omit to state a material fact necessary in 

order to make the statements made not untrue or misleading; (3) Engage, 

or attempt to engage, in any act, practice, or course of business, which 

operates or would operate as a fraud or deceit upon any person . . . 

Binary Options Swaps Fraud 

155. Between June 2014 and October 2016, as set forth in paragraphs 2-4, 6, 16, 36-

48, 73, 75-85, 100-101, and 103-104, Fingerhut, on behalf of AIP, intentionally or recklessly 

created and/or disseminated fraudulent solicitations for at least twenty (20) of AIP’s binary 

options campaigns that included materially false or misleading statements in emails, websites, 

and fictitious sales videos promising free access to Trading Systems that purported to trade 

automatically on behalf of the customer to induce prospective customers to open and fund a 

binary options trading account with a recommended broker to earn commissions for AIP. 

156. Between June 2014 and October 2016, Fingerhut, on behalf of AIP, by the 

conduct alleged in paragraphs 2-4, 6, 16, 36-48, 73, 75-85, 100-101, and 103-104, directly and 

indirectly, in connection with binary options (swaps) intentionally or recklessly: (1) used or 

employed, or attempted to use or employ, manipulative devices, schemes, and artifices to 

defraud; (2) made, or attempted to make, untrue or misleading statement of a material fact or 

omitted to state material facts necessary in order to make statements made not untrue or 

misleading; and (3) engaged, or attempted to engage, in acts, practices, and courses of business, 

which operated or would operate as a fraud or deceit upon customers and prospective customers, 

in violation of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3). 

157. Between October 2013 and November 2016, as set forth in paragraphs 1-4, 6, 16, 

19-24, 26-27, 36-61, 73-85, 100-101, and 103-104, AIP, through its owners, officers, employees, 

and/or agents, including Fingerhut’s acts during the period of June 2014 to October 2016, 

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intentionally or recklessly created and/or disseminated fraudulent solicitations for at least 

twenty-four (24) binary options campaigns that included materially false or misleading 

statements in emails, websites, and fictitious sales videos promising free access to Trading 

Systems that purported to trade automatically on behalf of the customer to induce prospective 

customers to open and fund a binary options trading account with a recommended broker to earn 

commissions for AIP. 

158. AIP, by the conduct alleged in paragraphs 1-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 

100-101, and 103-104, directly and indirectly, in or in connection with binary options (swaps), 

intentionally or recklessly: (1) used or employed, or attempted to use or employ, manipulative 

devices, schemes, and artifices to defraud; (2) made, or attempted to make, untrue or misleading 

statement of a material fact or omitted to state material facts necessary in order to make 

statements made not untrue or misleading; and (3) engaged, or attempted to engage, in acts, 

practices, and courses of business, which operated or would operate as a fraud or deceit upon 

customers and prospective customers, in violation of 7 U.S.C. § 9(1) and 17 C.F.R. 

§ 180.1(a)(1)-(3). 

159. As set forth in paragraphs 1-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-104, between at least October 2013 and November 2016, AIP violated 7 U.S.C. § 9(1) and 

17 C.F.R. § 180.1(a)(1)-(3) through the acts of its owners, officers, agents, and/or employees, 

including Fingerhut’s acts between June 2014 and October 2016 because Fingerhut’s conduct 

was within the scope of his employment, office or agency with AIP. AIP is therefore liable for 

Fingerhut’s acts, omissions, and failures constituting violations of 7 U.S.C. § 9(1) and 17 C.F.R. 

§ 180.1(a)(1)-(3) pursuant to 7 U.S.C. § 2(a)(1)(B) and 17 C.F.R. §1.2. 

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160. As set forth in paragraphs 2-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-04, between October 2013 and November 2016, DPL, through Valariola and Barak, 

willfully aided and abetted AIP’s twenty-four (24) fraudulent binary options campaigns by 

supplying certain false sales videos, knowing AIP used similar false or misleading statements in 

video and email solicitations that it created and disseminated to prospective customers, sharing 

those solicitations with brokers and encouraging their use in the brokers’ further solicitations, 

serving as an intermediary with the brokers, supplying the Trading Systems that did not operate 

as marketed, and handling the commissions resulting from the fraud. Therefore, pursuant to 

Section 13(a) of the Act, 7 U.S.C. § 13c(a) (2016), DPL is liable for AIP’s violations of 7 U.S.C. 

§ 9(1) and 17 C.F.R. § 180.1(a)(1)-(3). 

161. As set forth in paragraphs 2-4, 6, 16, 19-24, 26-27, 36-61, 73-85, 100-101, and 

103-04, between October 2013 and November 2016, Valariola and Barak willfully aided and 

abetted DPL’s violations of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3) within the scope of 

their employment, office or agency with DPL. DPL is therefore liable for Valariola’s and 

Barak’s acts, omissions, and failures constituting violations of 7 U.S.C. § 6c(b) and 17 C.F.R. § 

32.4 pursuant to 7 U.S.C. § 2(a)(1)(B) and 17 C.F.R. §1.2. 

162. As set forth in paragraphs 2-4, 6, 19-24, 49-61, 74, and 104, Valariola and Barak 

controlled DPL throughout the relevant period, including between October 2013 and November 

2016. Valariola and Barak failed to act in good faith and/or knowingly induced DPL’s 

violations alleged herein. Valariola and Barak are therefore liable for DPL’s violations as 

controlling persons pursuant to Section 13(b) of the Act, 7 U.S.C. § 13c(b) (2018). 

Digital Assets Commodity and Swaps Fraud 

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163. Between October 2016 and August 2018, as set forth in paragraphs 5,6, 16, 19-

24, 62-72, 86-99, 100, and 102-106, Fingerhut intentionally or recklessly created and/or 

disseminated fraudulent solicitations for at least eleven digital assets campaigns that included 

materially false or misleading statements in emails, websites, and fictitious sales videos 

promising free access to DA Trading Systems that purported to trade Bitcoin or Ethereum digital 

assets and/or options involving those digital assets automatically on behalf of the customer to 

induce prospective customers to open and fund a digital assets trading accounts with a 

recommended broker to earn commissions for eleven (11) campaigns. 

164. Between October 2016 and August 2018, as set forth in paragraphs 5,6, 16, 19-

24, 62-72, 86-99, 100, and 102-106, Fingerhut directly and indirectly, in connection with digital 

assets and/or digital assets options intentionally or recklessly: (1) used or employed, or 

attempted to use or employ, manipulative devices, schemes, and artifices to defraud; (2) made, 

or attempted to make, untrue or misleading statement of a material fact or omitted to state 

material facts necessary in order to make statements made not untrue or misleading; and (3) 

engaged, or attempted to engage, in acts, practices, and courses of business, which operated or 

would operate as a fraud or deceit upon customers and prospective customers, in violation of 7 

U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3). 

165. Between October 2016 and August 2018, the Digital Platinum Defendants, 

through their owners, officers, employees and/or agents including Fingerhut, by the conduct 

alleged in paragraphs 5,6, 16, 19-24, 62-72, 86-99, 100, and 102-106, intentionally or recklessly 

created and/or disseminated fraudulent solicitations for at least eleven digital assets campaigns 

that included materially false or misleading statements in emails, websites, and fictitious sales 

videos promising free access to DA Trading Systems that purported to trade Bitcoin or Ethereum 

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digital assets and/or options involving those digital assets automatically on behalf of the 

customer to induce prospective customers to open and fund a digital assets trading accounts with 

a recommended broker to earn commissions for eleven (11) campaigns. 

166. Between October 2016 and August 2018, the Digital Platinum Defendants, 

through their owners, officers, employees and/or agents including Fingerhut, by the conduct 

alleged in paragraphs 5,6, 16, 19-24, 62-72, 86-99, 100, and 102-106, directly and indirectly, in 

or in connection with commodities in interstate commerce and/or swaps intentionally or 

recklessly: (1) used or employed, or attempted to use or employ, manipulative devices, schemes, 

and artifices to defraud; (2) made, or attempted to make, untrue or misleading statement of a 

material fact or omitted to state material facts necessary in order to make statements made not 

untrue or misleading; and (3) engaged, or attempted to engage, in acts, practices, and courses of 

business, which operated or would operate as a fraud or deceit upon customers and prospective 

customers, in violation of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3). 

167. Between October 2016 and August 2018, Fingerhut’s acts, misrepresentations and 

omissions occurred within the scope of his employment, office or agency with Digital Platinum 

Defendants as set forth in paragraphs 5, 6, 16, 19-24, 62-72, 86-99, 100, 102-106. Therefore, 

Digital Platinum Defendants are liable for his acts omissions, and failures constituting violations 

of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3) pursuant to 7 U.S.C. § 2(a)(1)(B) and 17 

C.F.R. § 1.2. 

168. As set forth in paragraphs 5, 6, 19-24, 49-61, 74, and 104, Valariola and Barak 

controlled DPL, DPI and Huf throughout the relevant period, including between October 2016 

and August 2018. Also as set forth in those paragraphs, Valariola and Barak failed to act in 

good faith and/or knowingly induced DPL’s, DPI’s, and Huf’s violations alleged herein. 

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Valariola and Barak are therefore liable for Digital Platinum Defendants’ violations as 

controlling persons pursuant to 7 U.S.C. § 13c(b). 

169. Each solicitation offering automated trading software that purported to trade 

binary options, digital assets, or options on digital assets automatically on behalf of customers is 

alleged as a separate and distinct violation of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3). 

COUNT IV 

Fingerhut’s False or Misleading Statements to the Commission Violated Section 6(c)(2) of 

the Act, 7 U.S.C. § 9(2) (2018) 

170. 7 U.S.C. § 9(2) provides, in relevant part, that it shall be unlawful for any person: 

[T]o make any false or misleading statement of a material fact to the 

Commission, including . . . any other information relating to a swap, or a 

contract of sale of a commodity, in interstate commerce, or for future delivery 

on or subject to the rules of any registered entity, or to omit to state in any 

such statement any material fact that is necessary to make any statement of a 

material fact made not misleading in any material respect, if the person knew, 

or reasonably should have known the statement to be false or misleading. 

171. Fingerhut intentionally or recklessly made various material false or misleading 

statements and/or omissions to Staff during telephone conversations, in his signed declaration, 

during his testimony at the Atkinson PI hearing, and during his deposition as set forth in 

paragraphs 8, 16, and 108-130, in violation of 7 U.S.C. § 9(2). 

172. For example, as set forth in paragraphs 108-113 and 114-120, Fingerhut falsely 

represented to Staff in telephone conversations that the only email address he used for the Digital 

Platinum Defendants’ business was dan@digitalplatinum.com. In fact, he regularly used a 

second email, a Gmail account, to conduct Digital Platinum Defendants’ business and that email 

account is where he received copies of fraudulent solicitations he created and/or disseminated for 

Digital Platinum Defendants’ digital assets campaigns. Fingerhut failed to search that Gmail 

account and produce relevant documents in response to an investigative and judicial subpoena. 

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Fingerhut deleted and/or deactivated the email account after speaking with Staff, receiving a 

subpoena and do not destroy letters, and after being notified that DPI received a subpoena that 

named him. 

173. Similarly, as set forth in paragraphs 8, 108-113 and 121-125, Fingerhut included 

materially false or misleading statements and omissions in his declaration and testified falsely 

during his deposition as to the nature of his role in Digital Platinum Defendants’ digital assets 

solicitation scheme. For example, Fingerhut lied about hiring individuals who were involved in 

writing swipes and sending out email solicitations. 

174. Likewise, as set forth in paragraphs 8, 108-113 and 126-130, Fingerhut falsely 

testified that he handed the laptop he used while working with Digital Platinum Defendants to 

Passerino at Fingerhut’s home on his birthday in 2018. 

175. Fingerhut’s false or misleading statements or omissions were material because 

they hindered Staff’s investigation, resulted in Staff taking legal action and making 

representations to the Court, and were designed to conceal Fingerhut’s substantial and integral 

role in Digital Platinum Defendants’ fraud and related evidence. 

176. Each false or misleading statement or omission, including the three examples set 

forth above, is alleged as separate and distinct violation of 7 U.S.C. § 9(2). 

VII. RELIEF REQUESTED 

177. WHEREFORE, the Commission respectfully requests that this Court, as 

authorized by Section 6c of the Act, 7 U.S.C. § 13a-1 (2018), and pursuant to the Court’s own 

equitable powers: 

a. Find that between June 2014 and October 2016 Fingerhut violated 

Sections 4c(b), 4o(1), and 6(c)(1) and (2) of the Act, 7 U.S.C. §§ 6c(b), 

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6o(1), 9(1), (2) (2018), and Regulations 32.4 and 180.1(a)(1)-(3), 17 

C.F.R. §§ 32.4, 180.1(a)(1)-(3) (2019). 

b. Enter an order of permanent injunction enjoining Fingerhut, his affiliates, 

agents, servants, employees, successors, assigns, attorneys, and all 

persons in active concert with him, who receives actual notice of such 

order by personal service or otherwise, from engaging in the conduct 

described above, in violation of 7 U.S.C. §§ 6c(b), 6o(1), and 9(1) and (2) 

and 17 C.F.R. §§ 32.4, 180.1(a)(1)-(3). 

c. Find that between October 2013 and November 2016 Digital Platinum 

Ltd., Valariola, and Barak aided and abetted AIP’s violations of 7 U.S.C. 

§§ 6c(b), 9(1) and 17 C.F.R. §§ 32.4, 180.1(a)(1)-(3); 

d. Enter an order of permanent injunction enjoining Valariola, Barak, Digital 

Platinum Ltd., its affiliates, agents, servants, employees, successors, 

assigns, attorneys, and all persons in active concert with them, who 

receives actual notice of such order by personal service or otherwise, from 

engaging in the conduct described above, in violation of 7 U.S.C. 

§§ 6c(b), 9(1) and 17 C.F.R. §§ 32.4, 180.1(a)(1)-(3); 

e. Find that between October 2016 and August 2018 Digital Platinum Ltd., 

Digital Platinum Inc., Huf Mediya Ltd. (a.k.a. Hoof Media Ltd.), 

Valariola, and Barak violated 7 U.S.C. § 9(1) and 17 C.F.R. § 

180.1(a)(1)-(3). 

f. Enter an order of permanent injunction enjoining Digital Platinum 

Limited, Digital Platinum Inc., Huf Mediya Ltd. (a.k.a. Hoof Media Ltd.), 

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Valariola, and Barak, their affiliates, agents, servants, employees, 

successors, assigns, attorneys, and all persons in active concert with them, 

who receive actual notice of such order by personal service or otherwise, 

from engaging in the conduct described above, in violation of 7 U.S.C. 

§ 9(1) and 17 C.F.R. § 180.1(a)(1)-(3). 

g. Find that Relief Defendant Aicel Carbonero received assets and/or funds 

to which she is not entitled. 

h. Enter an order of permanent injunction prohibiting all Defendants and any 

of their affiliates, agents, servants, employees, assigns, attorneys, and 

persons in active concert or participation with them, from directly or 

indirectly: 

i. Trading on or subject to the rules of any registered entity (as 

that term is defined in Section 1a(40) of the Act, 7 U.S.C. 

§ 1a(40)); 

ii. Entering into any transactions involving “commodity interests” 

(as that term is defined in Regulation 1.3, 17 C.F.R. § 1.3 

(2019)) for Defendants’ own personal accounts or for any 

accounts in which Defendants have a direct or indirect interest; 

iii. Having any commodity interests traded on their behalf; 

iv. Controlling or directing the trading for or on behalf of any 

other person or entity, whether by power of attorney or 

otherwise, in any account involving commodity interests; 

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v. Soliciting, receiving or accepting any funds from any person 

for the purpose of purchasing or selling any commodity 

interests; 

vi. Applying for registration or claiming exemption from 

registration with the Commission in any capacity, and 

engaging in any activity requiring such registration or 

exemption from registration with the Commission, except as 

provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) 

(2019); and 

vii. Acting as a principal (as that term is defined in Regulation 

3.1(a), 17 C.F.R. § 3.1(a) (2019)), agent or any other officer or 

employee of any person (as that term is defined in Section 1a 

of the Act, 7 U.S.C. § 1a) registered, exempted from 

registration or required to be registered with the Commission 

except as provided for in 17 C.F.R. § 4.14(a)(9). 

i. Enter an order directing all Defendants and Relief Defendant, as well as any 

third-party transferee and/or successors thereof, to disgorge to any officer 

appointed or directed by the Court all benefits received including, but not 

limited to, salaries, commissions, loans, fees, revenues, real and personal 

property and trading profits derived, directly or indirectly, from acts or 

practices that constitute violations of the Act and the Regulations, including 

pre- and post-judgment interest; 

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j. Enter an order directing all Defendants, as well as any successors thereof, to 

make full restitution to every person or entity whose funds Defendants 

received or caused another person or entity to receive as a result of acts and 

practices that constituted violations of the Act and the Regulations, as 

described herein, and pre- and post-judgment interest thereon from the date of 

such violations; 

k. Enter an order directing each Defendant to pay civil monetary penalties, to be 

assessed by the Court, in an amount not more than the penalty prescribed by 

Section 6c(d)(1) of the Act, 7 U.S.C. § 13a-1(d)(1) (2018), as adjusted for 

inflation pursuant to the Federal Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015, Pub. L. 114–74, 129 Stat. 584 (2015), title VII, 

Section 701, see Commission Regulation 143.8, 17 C.F.R. § 143.8 (2019), for 

each violation of the Act, as described herein; 

l. Enter an order requiring all Defendants to pay costs and fees as permitted by 

28 U.S.C. §§ 1920 and 2412(a)(2) (2018); and 

m. Enter an Order providing such other and further relief as this Court may deem 

necessary and appropriate. 

Dated: May 5, 2020 

Respectfully submitted, 

/s/ Allison V. Passman 

Allison V. Passman, trial counsel 

Special Bar ID #A5502489 

Candice Haan, trial counsel 

Special Bar ID#A5502564 

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Susan Gradman, trial counsel 

Special Bar ID #A5501721 

Attorneys for Plaintiff 

Commodity Futures Trading 

Commission 

525 W. Monroe St. 

Chicago, IL 60661 

Tel. (312) 596-0700 

Fac. (312) 596-0714 

apassman@cftc.gov 

sgradman@cftc.gov 

chaan@cftc.gov 

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