FROM: COMMODITY FUTURES TRADING COMMISSION
March 24, 2014
Federal Court in North Carolina Orders Mitchell Brian Huffman to Pay $2.1 Million Penalty for Defrauding Customers of More than $3.2 Million in Commodity Pool Scheme
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court supplemental Consent Order requiring CFTC Defendant Mitchell Brian Huffman, of Charlotte, North Carolina, to pay a $2.1 million civil monetary penalty for operating a fraudulent commodity pool scheme that defrauded customers of more than $3.2 million in connection with exchange-traded commodity futures contracts (see CFTC Press Release 6183-12, February 17, 2012). In an separate Order as part of Huffman’s criminal sentencing, Huffman was ordered to pay $3.2 million in restitution to defrauded customers (see United States v. Mitchell Bran Huffman, Case Number 3:1-cr-00246 RJC filed in the U.S. District Court for the Western District of North Carolina).
The supplemental Order was entered on March 20, 2014, by Judge Graham Mullen of the U.S. District Court for the Western District of North Carolina and follows a Consent Order of permanent injunction entered on May 10, 2012, by Judge Mullen.
The Consent Order finds that Huffman operated a fraudulent commodity pool scheme that defrauded customers of more than $3.2 million in connection with exchange-traded commodity futures contracts. In agreeing to the entry of the Consent Order, Huffman admitted to the factual and legal allegations contained in the CFTC’s Complaint, and the findings of fact and conclusions of law in the Consent Order. The Consent Order also imposes permanent trading and registration bans against Huffman, prohibits him from violating federal commodities law, as charged, and requires him to pay restitution and a civil monetary penalty as provided for in the supplemental Order.
According to the CFTC’s Complaint, from at least August 2006 to March 11, 2011, Huffman solicited prospective and actual pool participants, mainly family and friends, via in-person and direct telephone solicitations, to allow him to buy and sell exchange-traded commodity futures contracts on their behalf. During the period, Huffman accepted at least $3.2 million from approximately 30 participants throughout the United States. Huffman entered into “sponsorship agreements” with pool participants wherein Huffman represented that he would pool participants’ funds to trade commodity futures contracts on their behalf. Huffman represented to participants that he utilized a “proprietary trading program” that generated “profits” of 100 percent to 150 percent per year. Huffman claimed to retain 20 percent of all profits purportedly made from the “proprietary trading program.”
All of these representations by Huffman were false, according to the Consent Order. Unknown to participants, Huffman misappropriated participants’ funds for a variety of personal uses, including but not limited to (1) purchasing multiple motor vehicles for his personal use, including two Land Rovers and a Smart Car, (2) at least $71,255 for purchases related to Huffman’s classic car collection, (3) approximately $188,583 on personal travel and luxury vacations, including Disney cruises and first-class airfare to Hawaii and Las Vegas, Nevada, and (4) approximately $51,540 in charitable contributions in Huffman’s name. The trip to Hawaii was a 25th wedding anniversary celebration for Huffman, and Huffman brought along several pool participants on the trip to Hawaii, purportedly at his own expense, according to the Consent Order. These participants were completely unaware that their funds were being used by Huffman to pay for the luxury vacation. When Huffman could no longer sustain his fraudulent scheme, he admitted to special agents of the Charlotte, North Carolina office of the Federal Bureau of Investigation the fraudulent scheme described above and his participation therein, the Consent Order finds.
The CFTC appreciates the assistance of the Office of the United States Attorney for the Western District of North Carolina and the Federal Bureau of Investigation, Charlotte Office.
CFTC Division of Enforcement staff members responsible for this case are Timothy J. Mulreany, Michael Amakor, and Paul Hayeck.
Showing posts with label CFTC. Show all posts
Showing posts with label CFTC. Show all posts
Monday, March 31, 2014
Thursday, July 18, 2013
CFTC OBTAINS PERMANENT INJUNCTION AGAINST CALIFORNIA RESIDENT FOR PART IN COMMODITY POOL FRAUD SCHEME
FROM: COMMODITY FUTURES TRADING COMMISSION
CFTC Obtains Default Judgment and Permanent Injunction against California Resident Michael J. Leighton for Defrauding Commodity Pool Participants
Court Orders Leighton to Pay over $2.3 Million in Sanctions and Restitution and Permanently Bars Him from the Commodities Industry
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Philip S. Gutierrez of the U.S. District Court for the Central District of California entered an Order of Default Judgment and Permanent Injunction against Michael J. Leighton of Torrance, California. The Order, entered on July 8, 2013, stems from a CFTC enforcement action filed on May 8, 2012 charging Leighton with solicitation fraud and issuing false statements in connection with the operation of a commodity trading pool (see CFTC Release 6256-12).
The Order requires Leighton to pay $1,650,230 in restitution to defrauded pool participants and a $700,000 civil monetary penalty. It also permanently enjoins Leighton from violating the anti-fraud provisions of the Commodity Exchange Act and Commission Regulations, as charged, and permanently bans Leighton from trading or engaging in activity requiring registration with the CFTC.
The Order finds that Leighton defrauded and deceived at least 48 pool participants who invested at least $1.65 million in a commodity pool he operated from at least July 2008 to March 2012. The Order also finds that Leighton willfully or recklessly misrepresented to pool participants and prospective participants that he was a successful trader and that his pool was profitable. It further finds that Leighton lost over $1.3 million of pool participant funds through trading. Leighton did not disclose those loses and, instead, issued false written statements to pool participants misrepresenting the profitability and value of their respective shares of the Leighton pool. The Order further finds that Leighton falsely represented that the National Futures Association (NFA) and CME Group, Inc. were conducting an audit or review of the pool that prevented him from making any distributions or cash withdrawals to pool participants. The Order additionally finds that, in fact, no such audits or reviews occurred and that Leighton also created and distributed a fabricated document that purported to be an audit report issued by the NFA.
In a related criminal action filed on May 9, 2012, the U.S. Attorney’s Office for the Central District of California charged Leighton with one count of commodities fraud in violation of Title 18, U.S.C. § 1348(2). United States v. Leighton, Case No. 2:12-cr-00439. Leighton entered a guilty plea in the related criminal action on July 11, 2012, and was sentenced to 60 months imprisonment on March 4, 2013.
The CFTC thanks the U.S. Attorney’s Office for the Central District of California, the Los Angeles Office of the Federal Bureau of Investigation, and the NFA for their assistance and cooperation in this action.
CFTC Division of Enforcement staff members responsible for this case are Elizabeth N. Pendleton, Melissa Glasbrenner, William P. Janulis, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
CFTC Obtains Default Judgment and Permanent Injunction against California Resident Michael J. Leighton for Defrauding Commodity Pool Participants
Court Orders Leighton to Pay over $2.3 Million in Sanctions and Restitution and Permanently Bars Him from the Commodities Industry
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Philip S. Gutierrez of the U.S. District Court for the Central District of California entered an Order of Default Judgment and Permanent Injunction against Michael J. Leighton of Torrance, California. The Order, entered on July 8, 2013, stems from a CFTC enforcement action filed on May 8, 2012 charging Leighton with solicitation fraud and issuing false statements in connection with the operation of a commodity trading pool (see CFTC Release 6256-12).
The Order requires Leighton to pay $1,650,230 in restitution to defrauded pool participants and a $700,000 civil monetary penalty. It also permanently enjoins Leighton from violating the anti-fraud provisions of the Commodity Exchange Act and Commission Regulations, as charged, and permanently bans Leighton from trading or engaging in activity requiring registration with the CFTC.
The Order finds that Leighton defrauded and deceived at least 48 pool participants who invested at least $1.65 million in a commodity pool he operated from at least July 2008 to March 2012. The Order also finds that Leighton willfully or recklessly misrepresented to pool participants and prospective participants that he was a successful trader and that his pool was profitable. It further finds that Leighton lost over $1.3 million of pool participant funds through trading. Leighton did not disclose those loses and, instead, issued false written statements to pool participants misrepresenting the profitability and value of their respective shares of the Leighton pool. The Order further finds that Leighton falsely represented that the National Futures Association (NFA) and CME Group, Inc. were conducting an audit or review of the pool that prevented him from making any distributions or cash withdrawals to pool participants. The Order additionally finds that, in fact, no such audits or reviews occurred and that Leighton also created and distributed a fabricated document that purported to be an audit report issued by the NFA.
In a related criminal action filed on May 9, 2012, the U.S. Attorney’s Office for the Central District of California charged Leighton with one count of commodities fraud in violation of Title 18, U.S.C. § 1348(2). United States v. Leighton, Case No. 2:12-cr-00439. Leighton entered a guilty plea in the related criminal action on July 11, 2012, and was sentenced to 60 months imprisonment on March 4, 2013.
The CFTC thanks the U.S. Attorney’s Office for the Central District of California, the Los Angeles Office of the Federal Bureau of Investigation, and the NFA for their assistance and cooperation in this action.
CFTC Division of Enforcement staff members responsible for this case are Elizabeth N. Pendleton, Melissa Glasbrenner, William P. Janulis, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Wednesday, June 12, 2013
TWO MEN AND A COMPANY TO PAY OVER $2.7 MILLION IN SANCTIONS FOR FRAUD
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Federal Court Orders Utah Residents Christopher D. Hales, Eric A. Richardson and their Company Bentley Equities, LLC to Pay More Than $2.7 Million in Sanctions for Fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained federal court orders for more than $2.7 million in disgorgement and civil monetary penalties against Bentley Equities, LLC (Bentley), a Delaware corporation, and its principals, Christopher D. Hales (Hales) and Eric A. Richardson (Richardson), resolving the CFTC’s May 2, 2012 Complaint charging them with fraud. Hales is currently an inmate at the Federal Correctional Institution in Safford, Arizona, and Richardson is currently an inmate at the Florence Federal Correction Complex in Florence, Colorado.
On May 31, 2013, the Honorable Dee Benson of the United States District Court for the District of Utah, Central Division, entered a Consent Order for Permanent Injunction against Richardson requiring him to pay $100,000 in disgorgement and a $150,000 civil monetary penalty. That Order also permanently bans Richardson from engaging in any commodity-related activity, including trading and registering with the CFTC, and prohibits him from violating the anti-fraud provisions of the Commodity Exchange Act, as charged. On May 14, 2013, Judge Benson also entered an Order for Default Judgment and Permanent Injunction against Hales and Bentley that requires Hales to pay $382,080 in disgorgement and $1,146,240 in civil monetary penalties and Bentley to pay an $840,000 civil monetary penalty. That Order also permanently bans Hales and Bentley from engaging in any commodity-related activity, including trading and registering with the CFTC, and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
The CFTC’s 2012 enforcement action against Hales, Richardson and Bentley charged them with fraudulently soliciting and accepting more than $1.1 million from approximately 39 customers for the purpose of trading commodity futures. It also alleged that they misappropriated approximately $658,452 of customer funds for personal expenses including auto expenses, utility bills and credit card payments and to make payments to existing customers in the manner of a Ponzi scheme. The Complaint further alleged that Hales, Richardson and Bentley misrepresented to customers that their trading was profitable, when in reality, they lost more than $482,000 trading commodity futures and that Hales and Bentley issued false statements to certain customers.
In related criminal prosecutions, Hales was sentenced to more than seven years imprisonment and ordered to pay $12,719,236 in criminal restitution in connection with a judgment entered against him in United States v. Christopher D. Hales, No. 2:10-CR-183-TS-SA-1 (C. D. UT, Sept. 2, 2010) and Richardson was sentenced to a year and a day imprisonment and ordered to pay $110,000 in criminal restitution in connection with a judgment entered against him in United States v. Eric A. Richardson, No. 2:12-CR-00354 (C.D. UT, June 27, 2012).
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the District of Utah, the U.S. Department of Housing and Urban Development—Office of Inspector General, the U.S. Postal Inspection Service and the FBI.
The following CFTC Division of Enforcement staff is responsible for this case: Brigitte Weyls, Joseph Patrick, Susan Gradman, Scott Williamson, Rosemary Hollinger and Richard Wagner.
Federal Court Orders Utah Residents Christopher D. Hales, Eric A. Richardson and their Company Bentley Equities, LLC to Pay More Than $2.7 Million in Sanctions for Fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained federal court orders for more than $2.7 million in disgorgement and civil monetary penalties against Bentley Equities, LLC (Bentley), a Delaware corporation, and its principals, Christopher D. Hales (Hales) and Eric A. Richardson (Richardson), resolving the CFTC’s May 2, 2012 Complaint charging them with fraud. Hales is currently an inmate at the Federal Correctional Institution in Safford, Arizona, and Richardson is currently an inmate at the Florence Federal Correction Complex in Florence, Colorado.
On May 31, 2013, the Honorable Dee Benson of the United States District Court for the District of Utah, Central Division, entered a Consent Order for Permanent Injunction against Richardson requiring him to pay $100,000 in disgorgement and a $150,000 civil monetary penalty. That Order also permanently bans Richardson from engaging in any commodity-related activity, including trading and registering with the CFTC, and prohibits him from violating the anti-fraud provisions of the Commodity Exchange Act, as charged. On May 14, 2013, Judge Benson also entered an Order for Default Judgment and Permanent Injunction against Hales and Bentley that requires Hales to pay $382,080 in disgorgement and $1,146,240 in civil monetary penalties and Bentley to pay an $840,000 civil monetary penalty. That Order also permanently bans Hales and Bentley from engaging in any commodity-related activity, including trading and registering with the CFTC, and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
The CFTC’s 2012 enforcement action against Hales, Richardson and Bentley charged them with fraudulently soliciting and accepting more than $1.1 million from approximately 39 customers for the purpose of trading commodity futures. It also alleged that they misappropriated approximately $658,452 of customer funds for personal expenses including auto expenses, utility bills and credit card payments and to make payments to existing customers in the manner of a Ponzi scheme. The Complaint further alleged that Hales, Richardson and Bentley misrepresented to customers that their trading was profitable, when in reality, they lost more than $482,000 trading commodity futures and that Hales and Bentley issued false statements to certain customers.
In related criminal prosecutions, Hales was sentenced to more than seven years imprisonment and ordered to pay $12,719,236 in criminal restitution in connection with a judgment entered against him in United States v. Christopher D. Hales, No. 2:10-CR-183-TS-SA-1 (C. D. UT, Sept. 2, 2010) and Richardson was sentenced to a year and a day imprisonment and ordered to pay $110,000 in criminal restitution in connection with a judgment entered against him in United States v. Eric A. Richardson, No. 2:12-CR-00354 (C.D. UT, June 27, 2012).
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the District of Utah, the U.S. Department of Housing and Urban Development—Office of Inspector General, the U.S. Postal Inspection Service and the FBI.
The following CFTC Division of Enforcement staff is responsible for this case: Brigitte Weyls, Joseph Patrick, Susan Gradman, Scott Williamson, Rosemary Hollinger and Richard Wagner.
Monday, February 18, 2013
MAN AND HIS COMPANY TO PAY $1.3 MILLION TO SETTLE COMMODITY POOL FRAUD CASE
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
February 12, 2013
Federal Court in Texas Orders Jonathan Hansen and His Company, J. Hansen Investments, LLC, to Pay over $1.3 Million to Settle Commodity Pool Fraud Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Order against Defendants Jonathan Hansen (Hansen) and his firm, J. Hansen Investments, LLC (JHI), requiring them to jointly pay approximately $878,000 in restitution to defrauded investors and a civil monetary penalty of approximately $483,900. The Order also imposes permanent trading and registration bans against the Defendants and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
The Consent Order of permanent injunction, entered by Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas, stems from a CFTC Complaint filed on August 24, 2012, against Hansen and JHI, charging them with fraud and misappropriation in the operation of a commodity pool scheme. Hansen was the owner and sole employee of JHI, and neither defendant has ever been registered with the CFTC.
The Order finds that Hansen fraudulently solicited and accepted over $1.1 million from investors to trade E-Mini S&P 500 futures contracts in a commodity pool Hansen operated. Hansen used only a small portion of pool participants’ funds to trade futures contracts, transferring such funds to his personal or JHI’s futures trading accounts, both of which sustained consistent losses, according to the Order. The Order also finds that Hansen misappropriated funds for his personal use and commingled pool funds with his own funds. Additionally, Hansen issued monthly account statements to pool participants falsely reporting profits earned in pool participants’ trading accounts and monthly trading memoranda falsely reporting monthly and annual trading returns, according to the Order.
The CFTC appreciates the assistance of the National Futures Association.
CFTC Division of Enforcement staff members responsible for this case are Danielle E. Karst, George Malas, Christine Ryall, Paul G. Hayeck, and Joan Manley.
February 12, 2013
Federal Court in Texas Orders Jonathan Hansen and His Company, J. Hansen Investments, LLC, to Pay over $1.3 Million to Settle Commodity Pool Fraud Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Order against Defendants Jonathan Hansen (Hansen) and his firm, J. Hansen Investments, LLC (JHI), requiring them to jointly pay approximately $878,000 in restitution to defrauded investors and a civil monetary penalty of approximately $483,900. The Order also imposes permanent trading and registration bans against the Defendants and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
The Consent Order of permanent injunction, entered by Judge Nancy F. Atlas of the U.S. District Court for the Southern District of Texas, stems from a CFTC Complaint filed on August 24, 2012, against Hansen and JHI, charging them with fraud and misappropriation in the operation of a commodity pool scheme. Hansen was the owner and sole employee of JHI, and neither defendant has ever been registered with the CFTC.
The Order finds that Hansen fraudulently solicited and accepted over $1.1 million from investors to trade E-Mini S&P 500 futures contracts in a commodity pool Hansen operated. Hansen used only a small portion of pool participants’ funds to trade futures contracts, transferring such funds to his personal or JHI’s futures trading accounts, both of which sustained consistent losses, according to the Order. The Order also finds that Hansen misappropriated funds for his personal use and commingled pool funds with his own funds. Additionally, Hansen issued monthly account statements to pool participants falsely reporting profits earned in pool participants’ trading accounts and monthly trading memoranda falsely reporting monthly and annual trading returns, according to the Order.
The CFTC appreciates the assistance of the National Futures Association.
CFTC Division of Enforcement staff members responsible for this case are Danielle E. Karst, George Malas, Christine Ryall, Paul G. Hayeck, and Joan Manley.
Tuesday, December 4, 2012
CONNECTICUT RESIDENT CHARGED WITH OPERATING A COMMODITY POOL PONZI SCHEME
FROM: COMMODITY FUTURES TRADE COMMISSION
CFTC Charges Connecticut Resident Feisal Sharif with Operating a $5.4 Million Commodity Pool Ponzi Scheme and Misappropriating at least $900,000 of Pool Participants’ Funds
In a related criminal action filed in September, the U.S. Attorney for the State of Connecticut charged Sharif with wire fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action charging defendant Feisal Sharif of Branford, Conn., with operating a commodity pool Ponzi scheme that solicited approximately $5.4 million from at least 50 people to invest in a commodity pool named First Financial, LLC. Sharif allegedly misappropriated at least $900,000 of pool participants’ funds, using the funds to pay personal expenses and purchase gifts. The CFTC complaint also charges Sharif with failing to register as a Commodity Pool Operator (CPO) of First Financial.
According to the complaint filed on November 26, 2012, in the U.S. District Court for the District of Connecticut, from at least January 2007 and continuing until September 13, 2012, Sharif, in order to entice prospective participants, guaranteed monthly and yearly returns of 1 percent to 15 percent on investments in the pool. Of the $5.4 million solicited from pool participants, at least $900,000 was misappropriated, approximately $1.32 million was lost trading futures in accounts in the name of First Financial, and $3.17 million was paid out to certain pool participants as fictitious "profits" or returns of principal, according to the complaint. Sharif allegedly admitted to one pool participant that he was operating a Ponzi scheme.
To falsely assure pool participants that their funds were safe in the pool’s trading accounts, Sharif allegedly fabricated trading account statements from First Financial and from futures commission merchants.
In its continuing litigation, the CFTC seeks civil monetary penalties, trading and registration bans, restitution, disgorgement, and a permanent injunction against further violations of the federal commodities laws.
The CFTC appreciates the cooperation of the Securities and Business Investments Division of the State of Connecticut Department of Banking, the Federal Bureau of Investigation, and the U.S. Attorneys’ Office for the State of Connecticut in this matter.
On September 14, 2012, in a related criminal action, the U.S. Attorney for the State of Connecticut charged Sharif with wire fraud.
The CFTC Division of Enforcement staff members responsible for this case are James Deacon, Amanda Harding, Jessica Harris, Kenneth McCracken, Rick Glaser, and Richard Wagner.
CFTC Charges Connecticut Resident Feisal Sharif with Operating a $5.4 Million Commodity Pool Ponzi Scheme and Misappropriating at least $900,000 of Pool Participants’ Funds
In a related criminal action filed in September, the U.S. Attorney for the State of Connecticut charged Sharif with wire fraud
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a civil enforcement action charging defendant Feisal Sharif of Branford, Conn., with operating a commodity pool Ponzi scheme that solicited approximately $5.4 million from at least 50 people to invest in a commodity pool named First Financial, LLC. Sharif allegedly misappropriated at least $900,000 of pool participants’ funds, using the funds to pay personal expenses and purchase gifts. The CFTC complaint also charges Sharif with failing to register as a Commodity Pool Operator (CPO) of First Financial.
According to the complaint filed on November 26, 2012, in the U.S. District Court for the District of Connecticut, from at least January 2007 and continuing until September 13, 2012, Sharif, in order to entice prospective participants, guaranteed monthly and yearly returns of 1 percent to 15 percent on investments in the pool. Of the $5.4 million solicited from pool participants, at least $900,000 was misappropriated, approximately $1.32 million was lost trading futures in accounts in the name of First Financial, and $3.17 million was paid out to certain pool participants as fictitious "profits" or returns of principal, according to the complaint. Sharif allegedly admitted to one pool participant that he was operating a Ponzi scheme.
To falsely assure pool participants that their funds were safe in the pool’s trading accounts, Sharif allegedly fabricated trading account statements from First Financial and from futures commission merchants.
In its continuing litigation, the CFTC seeks civil monetary penalties, trading and registration bans, restitution, disgorgement, and a permanent injunction against further violations of the federal commodities laws.
The CFTC appreciates the cooperation of the Securities and Business Investments Division of the State of Connecticut Department of Banking, the Federal Bureau of Investigation, and the U.S. Attorneys’ Office for the State of Connecticut in this matter.
On September 14, 2012, in a related criminal action, the U.S. Attorney for the State of Connecticut charged Sharif with wire fraud.
The CFTC Division of Enforcement staff members responsible for this case are James Deacon, Amanda Harding, Jessica Harris, Kenneth McCracken, Rick Glaser, and Richard Wagner.
Wednesday, May 9, 2012
MAN CHARGED WITH COMMODITY POOL FRAUD
FROM: CFTC
CFTC Charges Illinois Resident Dimitry Vishnevetsky and His Company, Oxford Capital, LLC, with Commodity Pool Fraud
Federal court enters emergency order freezing defendants’ assets and protecting books and records
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on May 1, 2012, the Honorable Ruben Castillo, of the U.S. District Court for the Northern District of Illinois, entered an order freezing the assets of defendants Dimitry Vishnevetsky of Chicago, Ill., and his company, Oxford Capital, LLC (OCL), a defunct Wisconsin limited liability company. The court’s order also prohibits the destruction of books and records.
The court’s order stems from a CFTC civil complaint also filed on May 1, 2012, charging Vishnevetsky and OCL with fraud in connection with the operation of two commodity pools and an additional commodity trading scheme. According to the complaint, from at least the fall of 2006 through the present, the defendants fraudulently solicited and accepted at least $1.74 million from pool participants and commodity customers.
The defendants allegedly defrauded pool participants by representing that their commodity pools had profitable performance records, based on audited results when, in fact, the defendants never conducted any trading for the pools. Vishnevetsky, individually and doing business as Hodges Trading LLC and Hodges Court Trading, also defrauded other pool participants by misrepresenting that Hodges issued Libor Notes and invested in commodity futures contracts to enhance the value of the purported Libor Notes, according to the complaint.
The complaint further alleges that the defendants misappropriated a portion of the pool participants’ monies and issued false account statements to them. The defendants defrauded customers by failing to open and fund commodity trading accounts for them, failing to place commodity trades for them, issuing fictitious account statements to them and misappropriating their monies, the complaint further alleges.
In its continuing litigation, the CFTC seeks civil monetary penalties, restitution, disgorgement of ill-gotten gains, permanent registration and trading bans, and preliminary and permanent injunctions against further violations of the federal commodities laws, as charged.
The CFTC appreciates the assistance of the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Northern District of Illinois, which filed a criminal indictment against Vishnevetsky on May 1, 2012.
CFTC Division of Enforcement staff members responsible for this case are Diane M. Romaniuk, Heather Johnson, Ava M. Gould, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
CFTC Charges Illinois Resident Dimitry Vishnevetsky and His Company, Oxford Capital, LLC, with Commodity Pool Fraud
Federal court enters emergency order freezing defendants’ assets and protecting books and records
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that on May 1, 2012, the Honorable Ruben Castillo, of the U.S. District Court for the Northern District of Illinois, entered an order freezing the assets of defendants Dimitry Vishnevetsky of Chicago, Ill., and his company, Oxford Capital, LLC (OCL), a defunct Wisconsin limited liability company. The court’s order also prohibits the destruction of books and records.
The court’s order stems from a CFTC civil complaint also filed on May 1, 2012, charging Vishnevetsky and OCL with fraud in connection with the operation of two commodity pools and an additional commodity trading scheme. According to the complaint, from at least the fall of 2006 through the present, the defendants fraudulently solicited and accepted at least $1.74 million from pool participants and commodity customers.
The defendants allegedly defrauded pool participants by representing that their commodity pools had profitable performance records, based on audited results when, in fact, the defendants never conducted any trading for the pools. Vishnevetsky, individually and doing business as Hodges Trading LLC and Hodges Court Trading, also defrauded other pool participants by misrepresenting that Hodges issued Libor Notes and invested in commodity futures contracts to enhance the value of the purported Libor Notes, according to the complaint.
The complaint further alleges that the defendants misappropriated a portion of the pool participants’ monies and issued false account statements to them. The defendants defrauded customers by failing to open and fund commodity trading accounts for them, failing to place commodity trades for them, issuing fictitious account statements to them and misappropriating their monies, the complaint further alleges.
In its continuing litigation, the CFTC seeks civil monetary penalties, restitution, disgorgement of ill-gotten gains, permanent registration and trading bans, and preliminary and permanent injunctions against further violations of the federal commodities laws, as charged.
The CFTC appreciates the assistance of the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Northern District of Illinois, which filed a criminal indictment against Vishnevetsky on May 1, 2012.
CFTC Division of Enforcement staff members responsible for this case are Diane M. Romaniuk, Heather Johnson, Ava M. Gould, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
Sunday, August 21, 2011
FORMER FUTURES AND OPTIONS TRADER TO PAY NEARLY $1.5 MILLION IN RESTITUTION/PENALTIES
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court default judgment order requiring Otmane El Rhazi to pay over $1.49 million in restitution and a civil monetary penalty for unlawful trading, misappropriation, and fraud. El Rhazi is a Moroccan national and a former futures and options trader and Vice President for Citigroup Global Markets Limited in the U.K.
The order, entered on July 29, 2011 by Judge Denise Cote of the U.S. District Court for the Southern District of New York, requires El Rhazi to pay $373,860 in restitution and a $1,121,580 civil monetary penalty. The order also imposes permanent trading and registration bans against El Rhazi.
The order stems from a CFTC complaint filed on April 15, 2011 (see CFTC Press Release 6025-11, April 18, 2011). The CFTC complaint charged El Rhazi with noncompetitive trading, fraud, and misappropriation from a Citibank, N.A. proprietary account for which he exercised trading authority as an employee of Citigroup Global Markets Limited.
The court’s order finds that El Rhazi engaged in numerous noncompetitive and fictitious futures trades in order to steal money from a Citibank, N.A. proprietary account and pass the money to his personal account. Starting on November 23, 2010, El Rhazi engaged in a series of noncompetitive palladium and platinum futures transactions executed on the New York Mercantile Exchange’s Globex trading platform “in order to steal money from the Citi Account and pass the money to his own Personal Account,” according to the order. The effect of the transactions was that there was no net change in the open positions of either El Rhazi’s account or the Citibank, N.A. proprietary account. The order finds that as a result of the transactions, El Rhazi’s Personal Account profited and the Citibank, N.A. account cumulatively lost $373,860.
The CFTC thanks the U.K. Financial Services Authority and the National Futures Association for their assistance.”
The order, entered on July 29, 2011 by Judge Denise Cote of the U.S. District Court for the Southern District of New York, requires El Rhazi to pay $373,860 in restitution and a $1,121,580 civil monetary penalty. The order also imposes permanent trading and registration bans against El Rhazi.
The order stems from a CFTC complaint filed on April 15, 2011 (see CFTC Press Release 6025-11, April 18, 2011). The CFTC complaint charged El Rhazi with noncompetitive trading, fraud, and misappropriation from a Citibank, N.A. proprietary account for which he exercised trading authority as an employee of Citigroup Global Markets Limited.
The court’s order finds that El Rhazi engaged in numerous noncompetitive and fictitious futures trades in order to steal money from a Citibank, N.A. proprietary account and pass the money to his personal account. Starting on November 23, 2010, El Rhazi engaged in a series of noncompetitive palladium and platinum futures transactions executed on the New York Mercantile Exchange’s Globex trading platform “in order to steal money from the Citi Account and pass the money to his own Personal Account,” according to the order. The effect of the transactions was that there was no net change in the open positions of either El Rhazi’s account or the Citibank, N.A. proprietary account. The order finds that as a result of the transactions, El Rhazi’s Personal Account profited and the Citibank, N.A. account cumulatively lost $373,860.
The CFTC thanks the U.K. Financial Services Authority and the National Futures Association for their assistance.”
Subscribe to:
Posts (Atom)