FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
July 12, 2013
CFTC Charges Texas-based RFF GP, LLC, KGW Capital Management, LLC, and Kevin G. White with Commodity Pool Fraud
Federal court issues emergency Order freezing assets and protecting books and records
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Eastern District of Texas entered an emergency Order freezing and preserving the remaining pool participants’ assets under the control of Defendants RFF GP, LLC (RFF GP), KGW Capital Management, LLC (KGW Capital), and Kevin G. White, and Relief Defendants Revelation Forex Fund, LP, Meridian Propane LP, and W Corporate Real Estate, LP (d/b/a KGW Real Estate), all of Plano, Texas. The Order also prohibits defendants and relief defendants from destroying books and records, grants the CFTC immediate access to those records, and appoints a temporary receiver to protect pool participants’ funds.
The Order arises out of a civil enforcement Complaint filed by the CFTC on July 9, 2013, charging RFF GP, KGW Capital, and White with fraudulently soliciting at least $5.8 million from at least 20 actual and prospective pool participants to participate in an off-exchange foreign currency (forex) commodity pool and misappropriating at least $1.7 million of pool participants’ funds.
According to the CFTC’s Complaint, the Defendants lured the public to invest by fraudulently telling prospective pool participants that their trading had been profitable, specifically touting compound annual growth rates as high as 37.08% and a total return on investment of 385.84% from 2009 to April 30, 2013. Further, Defendants allegedly told prospective pool participants that White had a 25-year successful career as a Wall Street broker. The Complaint alleges that, in fact, defendants had been losing money since beginning trading, which had not commenced until September 2011. The Complaint alleges further that the Defendants failed to disclose the fact that they had been losing money, that they had been misappropriating pool participants’ funds, that White had been fired from his employment as a broker after a seven-year career in the securities industry, and that White had been both censured and barred by the New York Stock Exchange.
In its continuing litigation, the CFTC seeks a permanent injunction from future violations of federal commodities laws, permanent registration and trading bans, restitution to defrauded pool participants, disgorgement of ill-gotten gains, and civil monetary penalties.
The CFTC appreciates the assistance of the Nevada Office of the Attorney General and the U.S. Securities and Exchange Commission’s Fort Worth, Texas regional office.
CFTC Division of Enforcement staff responsible for this case are Harry E. Wedewer, Dmitriy Vilenskiy, Jeremy Christianson, Rainey Perez, John Einstman, Paul G. Hayeck, and Joan Manley.
Showing posts with label ASSET FREEZE. Show all posts
Showing posts with label ASSET FREEZE. Show all posts
Monday, July 15, 2013
Thursday, September 20, 2012
SEC ANNOUNCES ASSET FREEZE AGAINST FIRM AND OWNER WHO ALLEGEDLY RAN $50 MILLION REAL ESTATE INVESTMENT FRAUD SCHEME
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., Sept. 7, 2012 – The Securities and Exchange Commission announced an asset freeze against a San Diego-based firm and its owner accused of running a real estate investment fraud that raised approximately $50 million from hundreds of investors nationwide.
The SEC alleges that Western Financial Planning Corporation and Louis V. Schooler sold units in partnerships that Western had organized to buy vacant land in Nevada and hold for sale at a profit at a later date. Schooler and Western failed to tell investors that they were paying an exorbitant mark-up on the land, in some cases more than five times its fair market value. Schooler and Western also failed to tell investors that the land held by the partnerships was often encumbered by mortgages that Western used to help finance the initial purchase of the land.
"Schooler conned hundreds of people into investing with Western by leading them to believe that they were getting a good value for plots of vacant land," said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. "What he didn’t tell them was that the land was worth only a small fraction of their investment and that he was profiting at their expense."
The SEC’s complaint filed in federal court in San Diego alleges that Western and Schooler misled investors since 2007 by providing them with comparative prices or "comps" of supposedly similar plots of land that had sold for prices higher than those offered by Western. In reality, the real estate comps that Schooler and Western provided were in no way comparable to the land sold by Western. The SEC also alleges that since the spring of 2011, Schooler paid "hush money" to silence investors who discovered they had been defrauded, allowing the scheme to continue.
The Honorable Larry A. Burns for the U.S. District Court for the Southern District of California yesterday granted the SEC’s request for a temporary restraining order and asset freeze against Schooler, Western, and all entities under Western’s control, and appointed Thomas C. Hebrank as a temporary receiver over Western and the entities. Judge Burns has scheduled a court hearing for Sept. 17, 2012, on the SEC’s motion for a preliminary injunction.
The SEC’s investigation was conducted by Sara Kalin and Carol Shau of the Los Angeles Regional Office. Molly White will lead the SEC’s litigation. Ron Warton, Andy Ganguly, Michelle Royston, and Karol Pollack conducted the SEC examination that prompted the investigation.
Washington, D.C., Sept. 7, 2012 – The Securities and Exchange Commission announced an asset freeze against a San Diego-based firm and its owner accused of running a real estate investment fraud that raised approximately $50 million from hundreds of investors nationwide.
The SEC alleges that Western Financial Planning Corporation and Louis V. Schooler sold units in partnerships that Western had organized to buy vacant land in Nevada and hold for sale at a profit at a later date. Schooler and Western failed to tell investors that they were paying an exorbitant mark-up on the land, in some cases more than five times its fair market value. Schooler and Western also failed to tell investors that the land held by the partnerships was often encumbered by mortgages that Western used to help finance the initial purchase of the land.
"Schooler conned hundreds of people into investing with Western by leading them to believe that they were getting a good value for plots of vacant land," said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office. "What he didn’t tell them was that the land was worth only a small fraction of their investment and that he was profiting at their expense."
The SEC’s complaint filed in federal court in San Diego alleges that Western and Schooler misled investors since 2007 by providing them with comparative prices or "comps" of supposedly similar plots of land that had sold for prices higher than those offered by Western. In reality, the real estate comps that Schooler and Western provided were in no way comparable to the land sold by Western. The SEC also alleges that since the spring of 2011, Schooler paid "hush money" to silence investors who discovered they had been defrauded, allowing the scheme to continue.
The Honorable Larry A. Burns for the U.S. District Court for the Southern District of California yesterday granted the SEC’s request for a temporary restraining order and asset freeze against Schooler, Western, and all entities under Western’s control, and appointed Thomas C. Hebrank as a temporary receiver over Western and the entities. Judge Burns has scheduled a court hearing for Sept. 17, 2012, on the SEC’s motion for a preliminary injunction.
The SEC’s investigation was conducted by Sara Kalin and Carol Shau of the Los Angeles Regional Office. Molly White will lead the SEC’s litigation. Ron Warton, Andy Ganguly, Michelle Royston, and Karol Pollack conducted the SEC examination that prompted the investigation.
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