FEDERAL COURT FREEZES ASSETS OF SEATTLE FIRM AND FOUR OTHER DEFENDANTS CHARGED WITH INTERNATIONAL SCHEME THAT DEFRAUDED U.S. CUSTOMERS OF OVER $8.5 MILLION
CFTC Alleged That Premium Income Corp., Its Principal, Gerald Rogers, And Others, Made False Claims About Profit and Risk, And Misappropriated Funds
Rogers is a Recent Ex-Convict Who Served Time for Similar Crimes
WASHINGTON, D.C. -- The U.S. Commodity Futures Trading Commission (CFTC) announced today that U.S. District Court Judge Jane J. Boyle of the Northern District of Texas issued a statutory restraining order freezing the assets of Premium Income Corp. (PIC), Inforex, Ltd.; Tri-Forex International, Ltd.; Gerald Leo Rogers; and Alexander Igor Shevchenko. Judge Boyle also entered asset freezes against the defendants, appointed a receiver to preserve assets, and ordered the repatriation of all funds in offshore accounts.
The order, entered on March 2, 2005, stems from a CFTC complaint filed the same day, alleging that the defendants violated the Commodity Exchange Act and Commission regulations by defrauding customers they solicited to write foreign currency covered call options. The complaint alleges that defendants raised over $8.5 million to date.
Specifically, the complaint alleges that, beginning in January 2004, Rogers and the other defendants solicited customers to send funds to PIC bank accounts by representing that customer funds would be used to enter into foreign currency covered call options. As alleged, defendants told customers they would be guaranteed a profitable annual return on their funds of between 10 percent and 14.2 percent with no risk of loss to their principal. According to the complaint, defendants represented that they made their “fixed income strategy of the decade” available exclusively in the United States under a special license agreement between defendants and a bank located in Switzerland.
As the complaint continues to allege, however, defendants did not disclose that customer funds were transferred immediately from PIC bank accounts to a domestic bank account in the name of defendant Inforex, Ltd., an entity under the sole control of Rogers, as well as to offshore accounts under Rogers’s control. At least a portion of those funds were used for purposes unrelated to foreign currency options trading, including the payment of personal expenses and the undisclosed payment of commissions to individuals who solicited customers, the complaint alleges.
The CFTC also alleges that defendant Rogers has a three-decade history of committing white-collar offenses involving multi-million dollar financial scams involving false investment programs, fictitious companies and products, and offshore bank accounts -- none of which was disclosed to PIC customers. According to the complaint, Rogers was paroled on December 24, 2003, after serving 13 years in prison and, within 30 days of his release, orchestrated the financial scam that is the subject of the CFTC complaint.
In its continuing litigation against defendants, the CFTC is seeking preliminary and permanent injunctive relief, a return of funds to defrauded customers, repayment of ill-gotten gains, and an award of civil monetary penalties. The court named Kelly Crawford, Esq. of Dallas, Texas as receiver.
The CFTC’s Office of Cooperative Enforcement coordinated this action with a related emergency enforcement action filed by the Securities and Exchange Commission against the same defendants, Civil Action No. 3-05-CV-0415-M (U.S.D.C./N.D. Texas, Dallas Division). The CFTC appreciates the cooperation of the SEC and the United States Parole Commission in this matter.
The following members of the CFTC’s Office of Cooperative Enforcement are responsible for this case: Richard Foelber, Daniel Nathan and Patricia Gomersall.
# # #