FROM: U.S. COMMODITY FUTURES TRADING COMMISSION
Federal Court in Massachusetts Orders Lyndon Parrilla to Pay over $17 Million in Disgorgement, Restitution, and a Penalty in Forex Fraud Scheme
In a related criminal proceeding, Parrilla sentenced to 97 months in prison and ordered to pay restitution of more than $4.6 million
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court Order awarding restitution for defrauded customers, disgorgement, and a civil monetary penalty totaling more than $17 million against defendant Lyndon Parrilla, of California, in connection with an off-exchange foreign currency (forex) fraud scheme in which Parrilla and his company, Green Tree Capital (Green Tree), defrauded over 50 customers in the United States of over $4 million.
Judge Joseph L. Tauro of the U.S. District Court for the District of Massachusetts entered the final judgment and permanent injunction Order on October 24, 2013 (see Related Link), requiring Parrilla to pay restitution of $4,197,342 to defrauded customers, disgorgement of $3,353,925, and a $10 million civil monetary penalty. The Order also imposes permanent trading and registration bans against Parrilla and prohibits him from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The Order stems from a CFTC Complaint filed on April 12, 2011, that charged Parrilla and Green Tree with fraud, misappropriation, and other CEA violations (see CFTC Press Release 6024-11). The court previously entered judgment against Green Tree on June 30, 2011.
The final judgment Order is based on the court’s findings set forth in an earlier Order, entered on September 30, 2013 (see Related Link), that finds that Parrilla and Green Tree fraudulently solicited over $4 million from at least 50 customers in the United States, from approximately October 2009 until April 2011, for the purported purpose of trading off-exchange forex contracts on a leveraged or margined basis in managed accounts.
In soliciting the funds, the Order finds that Parrilla, on behalf of Green Tree, misrepresented that Green Tree had a record of delivering consistently profitable returns when, in fact, it incurred trading losses since its inception, and almost 80 percent of customer funds was never traded or invested in any manner. In fact, according to the Order, Parrilla misappropriated over $3.3 million of customer funds to pay personal and entertainment expenses, including Las Vegas casino expenses, purchase automobiles and clothing, and ATM or cash withdrawals. To disguise these misrepresentations, trading losses, and misappropriations, Parrilla sent false Green Tree account statements to customers by email. Further, the Order finds that Parrilla misrepresented his experience and expertise, and failed to disclose that the National Futures Association (NFA) permanently barred him from NFA membership.
As a result of a parallel criminal action brought by the U.S. Attorney’s Office in November 2012, Parrilla was sentenced to, among other things, a term of 97 months imprisonment and ordered to pay restitution in the amount of $4,675,156.
The CFTC appreciates the assistance of the Federal Bureau of Investigation and the U.S. Attorney’s Office for the District of Massachusetts.
CFTC Division of Enforcement staff members responsible for this case are Alex C. Levine, David Chu, Lindsey Evans, Melissa Glasbrenner, Mary Beth Spear, Ava M. Gould, Scott Williamson, Rosemary Hollinger, and Richard B. Wagner.
Showing posts with label RESTITUTION. Show all posts
Showing posts with label RESTITUTION. Show all posts
Thursday, November 14, 2013
Wednesday, June 5, 2013
FDIC SETTLES WITH FINANCIAL COMPANIES REGARDING ALLEGED UNFAIR AND DECEPTIVE PRACTICES
FROM: FEDERAL DEPOSIT INSURANCE CORPORATION
FDIC Announces Settlements With First California Bank (FCB), Westlake Village, California, and Achieve Financial Services, LLP (Achieve), Austin, Texas The Federal Deposit Insurance Corporation (FDIC) announced settlements with First California Bank (FCB), Westlake Village, California, and Achieve Financial Services, LLP (Achieve), Austin, Texas, for unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act (Section 5) and violations of the Treasury Rule, 31 C.F.R. § 210, governing the use of the Automated Clearing House system to deliver federal benefit payments to prepaid debit cards. Under the settlements, each entity has agreed to a Consent Order, Order for Restitution, and Order to Pay Civil Money Penalty (collectively, Orders). Achieve and FCB have agreed to provide restitution of approximately $1.1 million to over 64,000 cardholders. In addition, the FDIC has assessed civil money penalties of $600,000 against FCB and $110,000 against Achieve.
The FDIC determined that Achieve and FCB engaged in unfair and deceptive practices in violation of Section 5 in the marketing and servicing of the AchieveCard, a prepaid, reloadable MasterCard. A number of the representations and omissions on Achieve's website were deceptive, such as advertising free online bill pay, promoting certain features and services of the AchieveCard that were not available to cardholders, and charging fees that were not clearly disclosed. Achieve's error resolution procedures imposed additional, undisclosed requirements on cardholders. For applicable consumers, these additional, undisclosed requirements and the failure to provide other appropriate protections violated both Section 5 and the Treasury Rule.
Achieve has agreed to provide restitution to all affected consumers. The restitution timeframe is from April 2011 to January 2013. FCB is ultimately liable for any restitution unpaid or any restitution obligation unfulfilled by Achieve. Achieve will send reimbursements without requiring any action by affected consumers.
The Orders direct FCB and Achieve not to engage further in any violations of law and set forth specific actions each must take to correct the identified violations of law. The Orders also require FCB and Achieve to strengthen their compliance management systems and to make periodic progress reports to the FDIC to ensure corrective action. FCB is further required to strengthen its oversight of third parties. Achieve is an institution-affiliated party of FCB.
In agreeing to the issuance of the Orders, FCB and Achieve do not admit or deny any liability.
FDIC Announces Settlements With First California Bank (FCB), Westlake Village, California, and Achieve Financial Services, LLP (Achieve), Austin, Texas The Federal Deposit Insurance Corporation (FDIC) announced settlements with First California Bank (FCB), Westlake Village, California, and Achieve Financial Services, LLP (Achieve), Austin, Texas, for unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act (Section 5) and violations of the Treasury Rule, 31 C.F.R. § 210, governing the use of the Automated Clearing House system to deliver federal benefit payments to prepaid debit cards. Under the settlements, each entity has agreed to a Consent Order, Order for Restitution, and Order to Pay Civil Money Penalty (collectively, Orders). Achieve and FCB have agreed to provide restitution of approximately $1.1 million to over 64,000 cardholders. In addition, the FDIC has assessed civil money penalties of $600,000 against FCB and $110,000 against Achieve.
The FDIC determined that Achieve and FCB engaged in unfair and deceptive practices in violation of Section 5 in the marketing and servicing of the AchieveCard, a prepaid, reloadable MasterCard. A number of the representations and omissions on Achieve's website were deceptive, such as advertising free online bill pay, promoting certain features and services of the AchieveCard that were not available to cardholders, and charging fees that were not clearly disclosed. Achieve's error resolution procedures imposed additional, undisclosed requirements on cardholders. For applicable consumers, these additional, undisclosed requirements and the failure to provide other appropriate protections violated both Section 5 and the Treasury Rule.
Achieve has agreed to provide restitution to all affected consumers. The restitution timeframe is from April 2011 to January 2013. FCB is ultimately liable for any restitution unpaid or any restitution obligation unfulfilled by Achieve. Achieve will send reimbursements without requiring any action by affected consumers.
The Orders direct FCB and Achieve not to engage further in any violations of law and set forth specific actions each must take to correct the identified violations of law. The Orders also require FCB and Achieve to strengthen their compliance management systems and to make periodic progress reports to the FDIC to ensure corrective action. FCB is further required to strengthen its oversight of third parties. Achieve is an institution-affiliated party of FCB.
In agreeing to the issuance of the Orders, FCB and Achieve do not admit or deny any liability.
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