For Release: May 15, 2002
FLORIDA FEDERAL COURT REQUIRES DEFENDANTS MICHAEL A. DIPPOLITO; MAD, INC.; AND CTU, INC. TO PAY RESTITUTION TO DEFRAUDED CUSTOMERS IN CFTC ENFORCEMENT ACTION
Court’s Order Also Bars Defendants From Further Fraudulent Conduct and From Trading Commodity Futures or Options
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that a Florida federal district court entered an order of default judgment permanently enjoining Myers, Arnold, Davidson, Inc. (MAD), of Boca Raton, Florida; Cooper, Thomas, Unger, Inc. (CTU) of Ft. Lauderdale, Florida; and their director, Michael A. Dippolito of Boca Raton, Florida from further violations of the federal commodities laws based on their fraudulent sales of options on foreign currency (Forex) and misappropriation of over $229,000 of customer funds.
The court’s order, filed on May 7, 2002, stems from a complaint filed by the CFTC in the United States District Court for the Southern District of Florida on February 19, 2002 (see CFTC Press Release 4611-02).
The defendants never responded to the CFTC’s allegations and a default order was entered on March 19, 2002. On March 20, 2002, Michael Dippolito was arrested by the Broward Sheriff’s Office and charged with telemarketing fraud for his alleged activities related to MAD and CTU.
The court’s order finds that, since April 2001, MAD and CTU fraudulently solicited and received more than $240,000 from customers purportedly to purchase foreign currency options. According to the order, MAD and CTU, unbeknownst to customers, operated without any physical office or location and instead utilized postal drop boxes, cell phones, Federal Express pick-up stations, and Kinko’s copying centers to run the forex scam.
Checks written by customers were cashed at a local check-cashing agency in Florida. MAD and CTU, in their sales pitches, urged customers to invest immediately in order to realize extraordinary profits and offered to sell to customers, at the original price, blocks of forex option contracts that the defendants claimed they had pre-purchased and that had already appreciated in value or that were poised to move dramatically in value due to known market conditions, according to the order. The order finds that instead of buying options, however, MAD, CTU, and Dippolito used the customers’ funds to pay for personal expenses such as hotels, entertainment, automobiles, and furniture.
The court’s order of default judgment finds that the defendants violated the anti-fraud provisions of the Commodity Exchange Act and permanently enjoins the defendants from further violations, and;
1) Orders that restitution be paid to injured investors in the amount of $229,615.51;
2) Requires the defendants to disgorge all benefits obtained as a result of the illegal acts; and
3) Provides for civil monetary penalties, which will be determined after an evidentiary hearing.
The following Division of Enforcement attorneys are responsible for the case: Vincent McGonagle, Michael Lee, Karon Powell, and Lael Campbell.
Media Case Contact:
Acting Associate Director, Division of Enforcement (202) 418-5387.
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