For Release: August 29, 2002
FLORIDA RESIDENTS AND THEIR COMPANIES CHARGED WITH MISAPPROPRIATING CUSTOMER FUNDS IN FOREIGN CURRENCY (FOREX) FUTURES SCAM
CFTC Charges First Bristol Group, Inc., Alliance Equity Group, Inc., Centurion Financial Group, LC, and Great Minster Group, Inc., Staci Lee Petok, Bernard Justin Sevilla, Jack Martin Pomeroy, and Michael Desmond Biggs With Fraud
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of an enforcement action on August 20, 2002, in federal court against four Florida firms and four individuals who are principals of the firms, charging them with fraudulently soliciting customers to invest in illegal off-exchange foreign currency (FOREX) futures contracts and options on these contracts, as well as in other futures contracts, and misappropriating at least $500,000 of customer funds.
Named in the CFTC complaint are: First Bristol Group, Inc. (FBG) of Fort Lauderdale, Florida; Alliance Equity Group, Inc. (AEG); Great Minster Group, Inc. (GMG) and Centurion Financial Group, LC (CFG), all of Hollywood, Florida. Also named are: Florida residents Staci Petok of Boca Raton, and FBG president; Jack Martin Pomeroy of Hollywood, and AEG president; Bernard Justin Sevilla of Hollywood, and the sole principal of GMG, vice-president of AEG, and contact person for FBG; and Michael Desmond Biggs, also of Hollywood, and the sole principal of CFG.
Federal Court Issues Order Freezing Defendants’ Assets
On the same day the complaint was filed, the Honorable Joan A. Lenard of the United States District Court for the Southern District of Florida issued an order freezing the assets of the defendants and prohibiting the destruction of books and records.
CFTC Alleges Defendants Enticed Investors With False Claims of Quick and Enormous Profits
The CFTC complaint charges that, since at least December 2000, the defendants have engaged in a fraudulent scheme to solicit customers to purchase illegal off-exchange FOREX contracts, and futures contracts on precious metals and petroleum products. The defendants allegedly enticed retail investors to send money by using false claims of quick and enormous profits. For instance, FBG salespersons claimed that a return of up to double or triple the investment was highly likely in a short period of time and that investors were “going to make tons of money” with “a minimal risk of loss.”
The complaint alleges that, after obtaining funds through such false solicitations, the defendants did not use the investors’ money to purchase any futures or options contracts, but instead misappropriated virtually all of the approximately $500,000 solicited from investors for their own personal uses. The complaint charges further that the defendants tried to mask their illegal activities by providing investors with false account statements showing fictitious trading activity.
In its litigation, the CFTC is seeking preliminary and permanent injunctive relief, restitution for defrauded customers, disgorgement of ill-gotten gains, and civil monetary penalties against each defendant of $120,000 per violation or triple the monetary gain, whichever is greater.
The CFTC appreciates the assistance of the Broward County Sheriff’s Office, the Florida State Comptroller’s Office, and the Broward County State Attorney’s Office in this matter.
Over the past year, the CFTC has brought, including today’s case, 16 enforcement actions alleging the sale of illegal foreign currency futures and options (see, e.g., CFTC News Releases 4675-02, July 22, 2002; 4652-02, June 10, 2002; 4636-02, May 2, 2002; 4611-02, February 27, 2002; 4513-01, May 2, 2001; 4528-01, June 20, 2001; 4551-01, August 14, 2001; and 4563-01, August 28, 2001).
Investors seeking information on FOREX investments should review the CFTC’s Consumer Advisory on Foreign Currency Fraud listing warning signs of FOREX scams. The CFTC also has issued two Advisories on how FOREX firms may lawfully offer foreign currency futures and options trading opportunities to the retail public (see CFTC Advisory 06-01, February 5, 2001; CFTC Press Release 4625-02, March 21, 2002; and CFTC Advisory, March 21, 2002).
The following Division of Enforcement staff members are responsible for this case: David Reed, Richard Foelber, and Elizabeth Padgett.
A copy of the CFTC complaint and restraining order may be obtained at www. cftc.gov.
Media Enforcement Contact:
CFTC Division of Enforcement
(202) 418- 5337
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