CORPORATION ORDERED TO RETURN $20.6 MILLION OF PONZI FRAUD PROFITS

FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
December 5, 2012

Federal Court in Idaho Orders CFTC Defendant Trigon Group, Inc. to Return More than $20.6 million of Ill-Gotten Gains to Victims of its Fraud

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Edward J. Lodge of the U.S. District Court for the District of Idaho entered a consent order of permanent injunction that requires defendant Trigon Group, Inc. (Trigon), an Idaho-based business, to disgorge more than $20.6 million of ill-gotten gains to the victims of its fraud. The consent order also imposes permanent trading and registration bans against Trigon and prohibits it from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.

The consent order stems from a CFTC complaint filed on February 27, 2009, that charged the defendant Trigon as well as defendant Daren L. Palmer with solicitation fraud and misappropriation in operating a commodity pool Ponzi scheme (see CFTC Press Release 5623-09, February 27, 2009, under Related Links). Earlier, on October 4, 2010, Judge Lodge entered a summary judgment order requiring Palmer to disgorge more than $20.6 million and to pay a civil monetary penalty of more than $20.6 million. The order also permanently bars Palmer from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC (see CFTC Press Release 5919-10, October 6, 2010, under Related Links).

The consent order finds that, from at least September 2000 to date of the complaint, defendants directly and indirectly solicited at least $40 million from at least 57 individuals or entities to invest in Trigon entities. Pool participants understood that their funds would be used for trading commodity futures on their behalf, among other things, S&P 500 index futures contracts. Defendants made repeated misrepresentations that the pool was profitable and growing. In fact, defendants misappropriated the vast majority of the funds invested by pool participants. The consent order also finds that the defendants violated registration requirements as charged.

The CFTC appreciates the assistance of the Securities and Exchange Commission (SEC) and the Idaho Department of Finance. The SEC filed a related action against Palmer and Trigon that also resulted in sanctions against them.

The CFTC Division of Enforcement staff members responsible for this case are Alison Wilson, John Dunfee, Mary Kaminski, A. Daniel Ullman, Paul G. Hayeck, and Joan Manley.