U.S. COMMODITY FUTURES TRADING COMMISSION AND STATE OF MARYLAND CHARGE MARYLAND RESIDENT ANDREW SILBERSTEIN WITH STEALING INVESTOR FUNDS IN COMMODITY FUTURES SCAM
Federal Court Enters Order Freezing Silberstein's Assets
WASHINGTON, D.C. - The U.S. Commodity Futures Trading Commission (CFTC) and the State of Maryland’s Office of Attorney General announced today that on April 8, 2004, the Honorable Richard D. Bennett of the U.S. District Court for the District of Maryland entered a restraining order freezing defendant Andrew Silberstein’s assets. On the same date, the court issued an order of preliminary injunction barring the defendant from engaging in fraud during the pendency of the civil action. The court’s orders stem from a joint action filed on March 5, 2004, charging the defendant with misappropriation of customer funds, issuance of false account statements, fraud, and operating an illegal commodity pool. The order also prohibits the defendant from destroying documents.
The complaint charges Andrew Silberstein, a resident of Baltimore, Maryland, with soliciting and accepting approximately $630,000 from at least seven members of the general public to participate in a commodity pool Silberstein operated to trade S & P 500 futures contracts. According to the complaint, Silberstein misappropriated more than $400,000 of investors’ funds to pay for personal expenses, such as his mortgage and his child’s college expenses, and to repay early investors in the Ponzi scheme. The complaint further alleges that Silberstein fabricated account statements and provided them to the investors.
According to the complaint, although Silberstein sent account statements to investors showing monthly profits of up to 45.3 percent, Silberstein’s account routinely lost money. As alleged, one false account statement Silberstein provided to an investor showed an account balance in excess of $1 million at a time when the actual account balance was less than $27,000.
In the ongoing litigation, the CFTC and the State of Maryland seek a permanent injunction against Andrew Silberstein, repayment of ill-gotten gains and customer losses, and monetary penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Rachel Entman, Kevin K. Batteh, Erin Vespe, and Gretchen L. Lowe. The Commission appreciates the cooperation of the Securities Division of the Maryland Attorney General's Office in investigating this matter.
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