For Release: October 23, 2003
MICHIGAN RESIDENT CHARGED WITH DEFRAUDING PARTICIPANTS
IN $1.2 MILLION COMMODITY POOL FRAUD SCHEME
Federal Court Order Freezes Assets of Defendants John Daniel Lee, Marquis Financial Management Systems, Inc., and The Marquis Group, Inc.
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on October 20, 2003, the Honorable Lawrence P. Zatkoff, Chief Judge of the United States District Court in Detroit, Michigan, issued an order freezing the assets and preventing the destruction of the books and records of defendants John Daniel Lee, of Flushing, Michigan, and Marquis Financial Management Systems, Inc. and The Marquis Group, Inc., both Panamanian corporations with mailing addresses in Flint, Michigan. The court also ordered the preservation of the books and records of David Paul Kelly II, of Flint, Michigan, and Joel Sofia, of Pitman, New Jersey.
The order stems from a CFTC complaint filed the same day, charging that beginning in January 2000, the defendants fraudulently solicited approximately $1.2 million from at least 10 public customers, and used a significant portion of those funds to trade commodity futures and options. CFTC v. Marquis Financial Management, et al., Civil Action No. 03-74206 (E.D.Mich.). The complaint alleges that more than $313,000 in investor funds was improperly used to benefit the defendants.
The complaint further alleges that the defendants falsely claimed to have accepted investor funds for 14 to 15 years and to have achieved exceptional returns for past investors. According to the complaint, the defendants did not tell new investors that their funds would be pooled and used to invest in commodity futures. The complaint also charges that defendants falsely assured investors that only 25 percent of their investment would be at risk and that they would achieve returns of 100 to 250 percent after a little more than a year. As alleged, the defendants lost more than $625,000 trading commodity futures and options, but did not report these losses to the investors and instead continued to report profits.
The CFTC is seeking an injunction against further violations of federal commodity laws, the repayment of ill-gotten gains, a refund of customer losses, and monetary penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Susan B. Padove, William Heitner, Robert J. Greenwald, Scott R. Williamson, and Rosemary Hollinger.
A copy of the CFTC complaint and restraining order may be obtained at www.cftc.gov.
Case Enforcement Contact:
Associate Director and Regional Counsel
CFTC Division of Enforcement
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