Release: 4620-02
For Release: March 19, 2002
CFTC Obtains Dismissal of Martin Armstrong’s Appeal for Release from Confinement
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC), together with the Securities and Exchange Commission (SEC) and court-appointed Receiver Alan Cohen of O’Melveny & Myers, prevailed on March 18, 2002, in a federal appeal brought by financier Martin Armstrong to obtain his release from confinement for civil contempt of court. Mr. Armstrong has been incarcerated by a federal district judge for over 26 months for failing to produce $14.9 million in missing assets, assets which the CFTC, the SEC, and the Receiver contend were the proceeds of fraud.
“Let wrongdoers make no mistake, we are serious about pursuing and punishing fraud,” said CFTC Chairman James E. Newsome. “Two years in jail is a long time, but the $14.9 million in missing assets which Mr. Armstrong has not turned over to the Court is a lot of money. I continue to hope that this decision will persuade Mr. Armstrong to produce the assets.”
The United States Court of Appeals for the Second Circuit dismissed Mr. Armstrong’s appeal for want of jurisdiction, rejecting his claim that the United States District Court for the Southern District of New York (Judge Richard Owens presiding) was acting in a punitive fashion in continuing Mr. Armstrong’s confinement. The Second Circuit agreed with the district court that Mr. Armstrong had presented no specific evidence to rebut the finding that he controlled the missing assets and therefore could produce them. It noted that, in light of the substantial sum of assets at stake, the district court acted within its discretion in continuing to confine Mr. Armstrong in an effort to coerce production of the assets.
The Second Circuit also rejected Mr. Armstrong’s protestation that the missing assets were not under his control because they were not found in an initial search of his home and office: “[I]t is not to be expected that Armstrong would have hidden the assets in his home or office.” The missing assets include rare coins, 102 gold bars, 699 gold bullion coins, and a $750,000 sculpture of Julius Caesar. Since his confinement on January 14, 2000, Mr. Armstrong has filed over a dozen appellate challenges. None of them has been successful.
A copy of the court’s decision, in PDF format, accompanies this press release. A hardcopy may be obtained by contacting the Commission’s Office of External Affairs, Three Lafayette Centre, 1155 21st Street, N.W., Washington, D.C. 20581, (202) 418-5080.
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