The CFTC obtained a federal court order requiring individuals and their affiliated companies to pay a civil monetary penalty of $32 million and restitution for defrauded customers totaling $12 million. The court’s order also imposes permanent trading and registration bans.
According to the order, the defendants fraudulently solicited and accepted at least $50.2 million from at least 243 individuals to invest in a commodity pool. In their solicitations, the defendants falsely claimed a successful track record and guaranteed the return of participants’ principal and profits. However, the defendants’ futures trading was not successful, sustaining overall net losses of approximately $10.7 million. The defendants also used participants’ funds to pay personal and unrelated business expenses, and to pay for houses, cars, home furnishings, jewelry, lawn and maid services, and credit card bills. In parallel criminal actions brought by the U.S. Attorney’s Office for the District of Utah, certain of the defendants were indicted on wire fraud.