For Release: August 8, 2002
Minnesota Federal Court Preliminarily Enjoins Foreign Currency Fraud
Defendants Sovereign Resource Management, Inc., Ken Mitra, Virgil Smith and Anthony Heppner Ordered to Account for Investor Funds
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced that a federal district court in Minnesota has entered an order preliminarily barring defendants Sovereign Resource Management, Inc., a Grenadian corporation, Ken Mitra, a Canadian citizen and president of Sovereign, Virgil E. Smith of Howard Lake, Minnesota and Anthony J. Heppner of Theilman, Minnesota, from engaging in commodity pool fraud, destroying documents or dissipating assets. The court also ordered the defendants to provide a preliminary accounting to the Court within thirty days, which identifies all their assets, liabilities and all investor funds received and disbursed by them in connection with any commodity futures transactions.
This order arises out of a complaint filed by the CFTC on July 18, 2002, charging that the defendants had fraudulently solicited and accepted over $1.7 million from at least 97 individuals to trade foreign currency (FOREX) futures contracts on their behalf and misappropriated over $600,000 of those funds. (See CFTC news release 4677-02, July 24, 2002).
After conducting a hearing, the Honorable Michael J. Davis of the U.S. District Court for the District of Minnesota entered the preliminary injunction order against the defendants on August 2, 2002. The court preliminarily finds in its order that the defendants committed fraud in connection with their solicitation of individuals to invest in FOREX futures contracts and misappropriated investors’ funds, as charged in the CFTC’s complaint.
In its continuing litigation, the CFTC will seek a permanent injunction against the defendants, a final accounting, restitution to investors, disgorgement of ill-gotten gains, and civil monetary penalties of not more than the higher of $120,000 or triple the monetary gain to the defendants.
The following Division of Enforcement staff are responsible for the case: Scott R. Williamson, William P. Janulis, Susan B. Padove, and Thomas J. Koprowski.
A copy of the court’s order of preliminary injunction may be obtained at: www.cftc.gov.
Media Enforcement Contact:
Scott R. Williamson
Deputy Regional Counsel
Division of Enforcement
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