Thursday, February 12, 2015
Wednesday, February 11, 2015
$2.5 MILLION IN SACNCTIONS ORDRED AGAINST OWNERS AND THEIR PRECIOUS METALS TRADING COMPANIES
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
February 5, 2015
CFTC Orders Florida Residents Isaiah Goldman and Brock Catronio and their Companies, Paramount Metals Exchange, LLC and Paramount Credit, LLC, to Pay More than $2.5 Million in Sanctions for Engaging in Illegal, Off-Exchange Precious Metals Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Isaiah Goldman and Brock Catronio, individually, and their companies, Paramount Metals Exchange, LLC and Paramount Credit, LLC (collectively Paramount), both of Delray Beach, Florida, for engaging in illegal, off-exchange precious metals transactions. Goldman resides in Boca Raton, Florida, and Catronio resides in Delray Beach.
The CFTC Order requires Goldman, Catronio, and Paramount jointly to pay restitution of $1,595,946 to their customers and jointly to pay a $1 million civil monetary penalty. In addition, the Order imposes permanent registration and trading bans on Goldman, Catronio, and Paramount.
The Order finds that, from December 2011 through February 2013, Goldman, Catronio, and Paramount solicited retail customers to engage in outright cash purchases of precious metals, falsely claiming to sell and transfer title of physical metals to customers and to arrange for the transfer and storage of the physical metals in independent depositories where such metal was purportedly held on the customers’ behalf.
The Order states that unknown to Paramount customers, Goldman, Catronio, and Paramount instead treated the customers’ transactions as financed purchases of metal in which the retail customer only paid a portion of the purchase price and took out a loan for the balance of the purchase price. According to the Order, Paramount’s customers paid a total of $3,306,032 and lost $1,595,946 of their funds to trading losses, commissions, interest charges, and other fees to Paramount and another company. Goldman, Catronio, and Paramount received $853,279 of those commissions and fees. Thus, the Order finds that, among other specific findings, Goldman, Catronio, and Paramount engaged in illegal, off-exchange transactions and committed fraud, violating provisions of the Commodity Exchange Act.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, financed transactions such as those conducted by Paramount, are illegal off-exchange transactions unless they result in actual delivery of metal within 28 days. According to the Order, Paramount’s retail financed precious metals transactions executed through Hunter Wise Commodities LLC did not result in actual delivery to the customer. In addition, as explained in the CFTC Order, financed transactions such as these must be executed on or subject to the rules of an exchange approved by the CFTC, which Paramount did not do.
The CFTC cautions that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
CFTC Division of Enforcement staff members responsible for this action are Susan B. Padove, Heather Johnson, Elizabeth M. Streit, Scott Williamson, and Rosemary Hollinger.
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CFTC’s Precious Metals Customer Fraud Advisory
Sunday, February 8, 2015
CHARTER BUS COMPANY OWNERS SENT TO PRISON FOR TAX AND BANK FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, February 4, 2015
California Charter Bus Company Owners Sentenced to Prison for Tax Fraud and Bank Home Mortgage Fraud
Two San Jose, California, brothers were sentenced to prison for committing tax fraud and bank fraud, Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Melinda Haag of the Northern District of California announced.
Fidencio Moreno, 52, was sentenced to serve 41 months in prison and three years of supervised release, and Arturo Moreno, 38, was sentenced to serve 28 months in prison and three years of supervised release. The court also ordered Arturo Moreno to pay $422,962 in restitution and to forfeit $3,328,600 and his interest in two pieces of real property. In January 2015, Elena Moreno, 40, the wife of Fidencio Moreno, was sentenced to serve 22 months in prison and three years of supervised release for her role in the conspiracies as a bookkeeper at the company. Prior to pleading guilty in this case, the three co-defendants collectively paid more than $200,000 in restitution to the Internal Revenue Service (IRS) for losses associated with their conspiracy to defraud the United States by filing false and fraudulent tax returns.
According to court documents, beginning in 2005 and continuing through at least 2010, Arturo, Fidencio and Elena Moreno conspired to defraud the United States by failing to report substantial amounts of gross receipts from their charter bus company, Quality Assurance Travel (QAT), on the federal corporate tax returns for QAT and on their personal income tax returns that they filed with the IRS. The total amount of unreported gross receipts of QAT during those years exceeded $966,908. Arturo and Fidencio Moreno were each 50 percent owners of QAT. The unreported income consisted primarily of cash receipts that were paid by passengers as they boarded the bus, but that were not deposited into the business bank accounts or disclosed to the Morenos’ tax return preparer.
According to court documents, between 2005 and July 2013, Arturo, Elena and Fidencio Moreno also conspired to commit bank fraud and wire fraud by submitting false and fraudulent home mortgage loan applications that overstated the applicants’ income and assets in order to acquire and refinance homes located in San Jose. In total, the defendants fraudulently obtained more than $3.3 million in home loans. After the defendants fell behind on the loan payments, they attempted to avoid foreclosure by submitting false and fraudulent applications to modify these loans. Two of the financial institutions approved the fraudulent applications, reducing the principal due on these loans. One of the four properties was ultimately sold via a short sale in 2013, while another was foreclosed upon in 2014. The total losses to the financial institutions resulting from the foreclosure and short sale exceeded $325,000.
The case was investigated by special agents of IRS-Criminal Investigation. Trial Attorney Todd P. Kostyshak of the Tax Division and Assistant U.S. Attorneys Thomas Moore and Katherine Wong prosecuted the case.
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