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.
Showing posts with label COMMODITY POOL PONZI SCHEME. Show all posts
Showing posts with label COMMODITY POOL PONZI SCHEME. Show all posts
Friday, December 7, 2012
Monday, July 30, 2012
PONZI COMMODITY POOL COMPANIES AND OWNER ORDERED TO PAY $41 MILLION
FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
July 16, 2012
Federal Court in California Orders Las Vegas Resident Gordon A. Driver and His Companies to Pay over $41 Million in Restitution and Penalties in Commodity Pool Ponzi Scheme
Court permanently bars defendants from commodities industry
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Central District of California entered a final judgment and permanent injunction order against defendants Gordon A. Driver of Las Vegas, Nev., Axcess Automation LLC (Axcess Automation), and Axcess Fund Management LLC (Axcess Fund), both Nevada companies owned and controlled by Driver, in connection with a commodity pool Ponzi scheme in which the defendants defrauded over 100 participants in the United States and Canada of over $14 million. Axcess Fund is registered with the CFTC as a Commodity Pool Operator (CPO), and Driver is registered as an Associated Person of Axcess Fund.
The court’s final judgment order, entered on July 12, 2012, by Judge Otis D. Wright, II, imposes permanent trading and registration bans against the defendants and requires them jointly and severally to pay restitution of over $9.5 million to defrauded pool participants and a $31.8 million civil monetary penalty. The order also permanently prohibits the defendants from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The order stems from a CFTC complaint filed on May 14, 2009, that charged the defendants with fraud, misappropriation, and other CEA violations (see CFTC Press Release 5704-09).
The July 12 order is based on the court’s July 5, 2012, summary judgment order, which finds that from between at least February 2006 and May 2009, Driver fraudulently solicited approximately $14,319,905 from over 100 participants by telling pool participants that Driver had a successful software program for trading E-mini S&P 500 futures; had profitable returns averaging one to five percent per week (or 20 percent per month); had profitable returns in seven or eight out of 10 trades; and minimized risk by terminating trading after three losing trades in one day. However, the order finds that Driver’s trading was "abysmally unprofitable," and that Driver traded only $3.7 million of the $14.3 million in pool funds he had received and lost 94 percent of those funds.
The summary judgment order also finds that the defendants never disclosed the actual losses to their participants and instead sent pool participants false account statements depicting profits, and that the defendants misappropriated more than $10 million from the pool to pay personal and business expenses. Such expenses, according to the order, included payment of $9.7 million to several pool participants as purported profits to conceal trading losses; however, these purported profits were not actual profits, but rather money invested by other pool participants. Driver used an additional $1.6 million of pool funds on gambling in Las Vegas casinos, rent, meals, travel, entertainment, car payments,computer equipment, clothing, and cash withdrawals, according to the summary judgment order.
The summary judgment order also finds that Driver and Axcess Automation acted as CPOs but failed to register as CPOs with the CFTC, as required by the CEA, and that the defendants commingled pool funds with non-pool property and Axcess Fund failed to timely comply with a CFTC document request. In related actions, the U.S. Securities and Exchange Commission (SEC) filed a complaint against Driver and Axcess Automation on May 14, 2009 (SEC v. Driver, et al., case no. 09cv3410 ODW, Central District of California), and the Ontario Securities Commission (OSC) filed an enforcement action against Driver and others on August 12, 2010. Both cases are currently pending.
July 16, 2012
Federal Court in California Orders Las Vegas Resident Gordon A. Driver and His Companies to Pay over $41 Million in Restitution and Penalties in Commodity Pool Ponzi Scheme
Court permanently bars defendants from commodities industry
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Central District of California entered a final judgment and permanent injunction order against defendants Gordon A. Driver of Las Vegas, Nev., Axcess Automation LLC (Axcess Automation), and Axcess Fund Management LLC (Axcess Fund), both Nevada companies owned and controlled by Driver, in connection with a commodity pool Ponzi scheme in which the defendants defrauded over 100 participants in the United States and Canada of over $14 million. Axcess Fund is registered with the CFTC as a Commodity Pool Operator (CPO), and Driver is registered as an Associated Person of Axcess Fund.
The court’s final judgment order, entered on July 12, 2012, by Judge Otis D. Wright, II, imposes permanent trading and registration bans against the defendants and requires them jointly and severally to pay restitution of over $9.5 million to defrauded pool participants and a $31.8 million civil monetary penalty. The order also permanently prohibits the defendants from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The order stems from a CFTC complaint filed on May 14, 2009, that charged the defendants with fraud, misappropriation, and other CEA violations (see CFTC Press Release 5704-09).
The July 12 order is based on the court’s July 5, 2012, summary judgment order, which finds that from between at least February 2006 and May 2009, Driver fraudulently solicited approximately $14,319,905 from over 100 participants by telling pool participants that Driver had a successful software program for trading E-mini S&P 500 futures; had profitable returns averaging one to five percent per week (or 20 percent per month); had profitable returns in seven or eight out of 10 trades; and minimized risk by terminating trading after three losing trades in one day. However, the order finds that Driver’s trading was "abysmally unprofitable," and that Driver traded only $3.7 million of the $14.3 million in pool funds he had received and lost 94 percent of those funds.
The summary judgment order also finds that the defendants never disclosed the actual losses to their participants and instead sent pool participants false account statements depicting profits, and that the defendants misappropriated more than $10 million from the pool to pay personal and business expenses. Such expenses, according to the order, included payment of $9.7 million to several pool participants as purported profits to conceal trading losses; however, these purported profits were not actual profits, but rather money invested by other pool participants. Driver used an additional $1.6 million of pool funds on gambling in Las Vegas casinos, rent, meals, travel, entertainment, car payments,computer equipment, clothing, and cash withdrawals, according to the summary judgment order.
The summary judgment order also finds that Driver and Axcess Automation acted as CPOs but failed to register as CPOs with the CFTC, as required by the CEA, and that the defendants commingled pool funds with non-pool property and Axcess Fund failed to timely comply with a CFTC document request. In related actions, the U.S. Securities and Exchange Commission (SEC) filed a complaint against Driver and Axcess Automation on May 14, 2009 (SEC v. Driver, et al., case no. 09cv3410 ODW, Central District of California), and the Ontario Securities Commission (OSC) filed an enforcement action against Driver and others on August 12, 2010. Both cases are currently pending.
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