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Case Status Report: One World Capital Group

  • U.S. Commodity Futures Trading Commission v. One World Capital Group, et al., Case Number 07-CV-7002; Filed in the Northern District of Illinois before Judge Lefkow

    Any important case developments or instructions to the customers will be posted to this website.

    Notice to customers:

    As explained below, in January 2009, John Walsh, president and principle of One World Capital Group and another One World Capital Group employee were arrested on federal fraud charges in connection with the operation of One World Capital Group. The United States Attorney’s Office for the Northern District of Illinois is currently in the process of determining alleged customer losses with the anticipation of providing restitution to alleged victims of the fraud. In January 2010, the Victim Witness Unit of the U.S. Attorney’s Office for the Northern District of Illinois sent email correspondence to potential One World customers seeking confirmation of amounts including bank statements. If you think you may have been a victim of One World Capital Group and seek further information about potential restitution, please contact the Victim Witness Unit of the U.S. Attorney’s Office for the Northern District of Illinois by email to usailn.victim.witness@usdoj.gov or send correspondence by mail to U. S. Attorney’s Office, Victim Witness Unit, 219 South Dearborn Street, 5th Floor, Chicago, IL 60604.

    February and March 2010: The Honorable Joan H. Lefkow of the United States District Court for the Northern District of Illinois entered the consent order of permanent injunction on February 25, 2010 against John “Jack” Walsh and One World Capital Group requiring, among other things, each to pay a $260,000 civil monetary penalty for failing to demonstrate compliance with CFTC net capital requirements thus settling the matter between the parties. (CFTC v. One World Capital Group, LLC, et al., N.D. Ill., Case No. 07CV 7002). Please see CFTC Press Release number 5786-10 at www.cftc.gov for further information and a copy of the Order.

    In a separate action on March 4, 2010, based on the facts of the federal district court case, the CFTC simultaneously filed and settled a statutory disqualification action against One World Capital Group, revoking its registrations as a futures commission merchant and commodity trading advisor.

    February 2, 2010: A status hearing was held before Judge Leflow. The parties continue to work on settling the matter.

    December 2007: The CFTC obtained an asset freeze when it filed the case and approximately $640,000 was frozen by the Court. In January 2009, John Walsh, president and principle of One World Capital Group and Charles Martin, a de-facto principal of One World Capital Group, were arrested on federal fraud charges in connection with the operation of One World Capital Group. In February 2009, the approximate $640,000 the CFTC froze when it filed the matter in December 2007 was seized by the criminal authorities. For further information and contacts regarding the criminal action and the potential to recover funds, go to http://www.justice.gov/usao/iln/pr/chicago/2009/pr0107_01.pdf and http://www.justice.gov/usao/iln/pr/chicago/2009/pr0107_01a.pdf

    October 2009: A status hearing was held before Judge Leflow. The parties continue to work on settling the matter. The next status hearing is set for January 26, 2010 at 9:30 a.m.

    August 2009: A status hearing was held before Judge Leflow. The parties continue to work on settling the matter. The next status hearing is set for October 27, 209 at 9:30 a.m.

    June 2009: A status hearing was held before Judge Leflow. The parties continue to work on settling the matter. The next status hearing is set for August 25, 2009 at 9:30 a.m.

    April 14, 2009: A status hearing was held before Judge Leflow: Defense counsel informed the judge that Mr.Walsh had posted bond and was released from prison. The parties continue to work on settling the matter. The next status hearing is set for June 16, 2009 at 9:30 a.m.

    February 2009: The United States Attorney's office for the Northern District of Illinois executed a seizure warrant and seized the funds that were frozen pursuant to this Court's Order. The United States Attorney's office and the Federal Bureau of Investigations will setting up an investor hotline and claims process for the potential future distribution of restitution in their criminal.

    February 10, 2009: A status hearing was held before Judge Lefkow: A representative from the United States Attorney's office attended and requested permission to file a seizure warrant regarding the assets frozen in this matter. The Judge granted the request. The Parties continue to work on a settlement in this matter. The next status date is set for April 14, 2009 at 9:30 a.m.

    January 7 & 8, 2009: John Walsh, president and principle of One World Capital Group and Charles Martin, who acted as principal of One World though was forbidden to do so by the National Futures Association, were arrested on federal fraud charges in connection with the operation of One World Capital Group. Both men were charged with one count of wire fraud on a criminal complaint that was filed on January 6, 2009. According to the criminal complaint, Martin and Walsh engaged in a scheme to obtain One World customer funds earmarked for over the counter foreign currency (“forex”) trades for their own use and benefit. Walsh and Martin allegedly used customer funds they misappropriated to finance extravagant lifestyles. For further information and to view the United States Attorney’s Office for the Northern District of Illinois press release, go to http://www.usdoj.gov/usao/iln/pr/chicago/2009/pr0107_01.pdf

    January 6, 2009: A status hearing was held before Judge Lefkow: The Parties continue to work to prepare a complete customer listing for submission to the court. The next status date is set for February 10, 2009 at 9:30 a.m.

    October 30, 2008: A status hearing was held before Judge Lefkow: The Parties continue to work to prepare a complete customer listing for submission to the court. The next status date is set for January 8, 2009 at 9:30 a.m.

    August 28, 2008: A status hearing was held before Judge Lefkow: The Parties continue to work to prepare a complete customer listing for submission to the court. The next status date is set for October 28, 2008.

    June 12, 2008: A status hearing was held before Judge Lefkow: The Defendants continue to work to complete an accounting. The next status date is set for August 28, 2008.

    April 3, 2008: A status hearing was held before Judge Lefkow: At which time the court required Defendants to complete an accounting by May 19, 2008. The next status date is set for June 12, 2008.

    During the status the following information was provided to the court:

    On December 13, 2007, the CFTC filed an emergency action against One World and its President Walsh because One World, a registered FCM, could not demonstrate compliance with net capital requirements. The Court granted our motion for a statutory restraining order (SRO) and asset freeze and the parties entered into a Consent Preliminary Injunction on February 8, 2008. Since the case was filed, the parties have been conducting expedited discovery. The CFTC has issued subpoenas for business records, including bank and trading records, and has been reviewing them. Pursuant to the SRO, the CFTC was able to freeze $639,815 in assets of One World. The CFTC has learned through customer interviews and a review of the records that there are customer claims of liabilities of between $12 and $14 million.

    Additionally, One World and it President have represented that it will not be issuing any 1099s to its customers. As a result, the parties have agreed to provide customers with the Tax ID number of the company:

    One World Capital Group, LLC

    Tax ID No. 20-3419350

    March 2008: The Court reset the status hearing to April 3, 2008.

    February, 2008: The Court entered a Consent Preliminary Injunction against Defendants One World Capital Group and John E. Walsh on February 6, 2008. The Consent, among other things, continues the asset freeze and preservation of books and records.

    A number of customers have made inquiries requesting the return of funds from their account. Please be advised that the parties cannot comply with any requests for disbursements of customer funds until the Court has entered an order that authorizes and directs the disbursement of funds. It is not anticipated that this can occur until the complete extent of One World’s assets and liabilities has been established, and the Court can rule on the allegations in the CFTC’s complaint. Unfortunately, at this time we cannot provide a timetable when this might occur. Lastly, we ask for your patience and hope that you understand this may take some time to sort out.

    January, 2008: The Division of Enforcement (Division) is currently conducting discovery which includes issuing subpoenas, gathering documents and taking deposition testimony in order to assess the facts and circumstances surrounding this situation.

    The National Futures Association (NFA) is the industrywide, self-regulatory organization for the U.S. futures industry. The NFA has been assisting the Division in collecting customer information. The Division asks all One World Capital Group (One World) customers to contact the Information Center at the National Futures Association at 312-781-1300 and provide them with your general One World account information. We also request that all customers or persons and entities otherwise associated with One World maintain copies of any documents including emails, statements, correspondence, applications, etc. pertaining to your dealings with One World and its employees and agents.

    Pursuant to the asset freeze obtained on December 13, 2007, all One World business must cease, and the status quo must be maintained. Therefore, no further trading on MetaTrader should occur, trades occurring after December 13, 2007 may not be honored, and funds and trading accounts cannot be transferred to different futures commission merchants (FCMs).

    December, 2007: The U.S. Commodity Futures Trading Commission (CFTC) announced that on December 13, 2007 it sued One World Capital Group, LLC (One World) of Winnetka, Illinois, a registered FCM, and its President, John Edward Walsh of Lake Forest, Illinois, charging them with inability to demonstrate compliance with capitalization requirements and with failure to maintain required books and records.

    On the same day the case was filed, the CFTC won an asset freeze and other emergency relief that will enable the Commission to freeze the assets of One World and safeguard the interests of its customers.

    The complaint alleges that One World has been unable to demonstrate that it has maintained at least $1 million in adjusted net capital, the minimum requirement needed for FCMs that are Foreign Currency Dealer members of the NFA.

    According to the CFTC complaint, since at least November 28, 2007, One World and Walsh failed to demonstrate compliance with the net capital amount as required by the Commodity Exchange Act and CFTC regulations. As of December 10, 2007, the complaint charges, One World failed to demonstrate that it had any net assets. While One World appeared to possess $554,000 of funds held in customer accounts, since at least November 2, 2007, the NFA has been receiving complaints from customers alleging that they are unable to get their funds back from One World. The complaint alleges that the amount claimed outstanding by customers exceeds $4 million. The complaint also alleges that Walsh conceded an inability to identify all of One World’s customer liabilities. Furthermore, the complaint charges One World and Walsh with failing to maintain books and records as required by a CFTC regulation.

    June 2009: A status hearing was held before Judge Leflow. The parties continue to work on settling the matter. The next status hearing is set for August 25, 2009 at 9:30 a.m.

    April 14, 2009: A status hearing was held before Judge Leflow. The parties continue to work on settling the matter. The next status hearing is set for January 26, 2010 at 9:30 a.m.October 2009:

    A status hearing was held before Judge Leflow: Defense counsel informed the judge that Mr.Walsh had posted bond and was released from prison. The parties continue to work on settling the matter. The next status hearing is set for June 16, 2009 at 9:30 a.m.

    Related Documents:

    Staff Contacts:
    Jennifer Diamond
    Attorney
    CFTC Division of Enforcement
    525 West Monroe Street
    Suite 1100
    Chicago, IL 60661
    jdiamond@cftc.gov

    Last Updated: March 23, 2011