For Release: April 21, 2003
CALIFORNIA COMPANY AND TWO CALIFORNIA RESIDENTS CHARGED WITH COMMODITY POOL FRAUD
CFTC Charges California Corporation and Two Employees With Fraud in Commodity Investment Scam
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of an enforcement action against Krute Corporation (Krute), located in Woodland Hills, California; Paulino Rene Dias, Jr. of Pollock Pines, California; and, Victor Smith of Los Angeles, California.
The CFTC complaint, filed on April 16, 2003, alleges that, between at least November 2001 and October 2002, Dias, Smith, and Krute solicited, accepted, and pooled in excess of $2 million from at least 13 members of the general public to participate in, among other things, an unregistered commodity pool to trade commodity futures and option contracts. Defendants then allegedly misappropriated approximately $530,000 of the pool’s funds to pay for personal and unauthorized business expenses, transferring approximately $150,000 to Iceland Management Systems, Inc. of Agoura Hills, California, and others who had no legitimate entitlement to those funds. The CFTC has named Iceland Management Services, Inc. as a relief defendant. The CFTC complaint also charges the defendants with registration violations and with failing to provide required periodic account statements to pool participants.
The CFTC is seeking preliminary and permanent injunctive relief, repayment of ill-gotten gains and customer losses, and civil penalties.
The National Futures Association assisted the CFTC staff in this investigation. The following CFTC Division of Enforcement staff are responsible for the case: Gretchen L. Lowe, Karen Kenmotsu, Jason Gizzarelli, and Lenora Kay Majors-Guy.
A copy of the complaint may be obtained at www.cftc.gov.
Media Enforcement Contact:
Gretchen L. Lowe, Associate Director
CFTC Division of Enforcement
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