FEDERAL COURT ENTERS JUDGMENTS AGAINST MICHIGAN AND NEW JERSEY RESIDENTS AND TWO PANAMANIAN COMPANIES IN MARQUIS COMMODITY POOL FRAUD CASE
Court Orders Payments To Customers And Penalties Totaling More Than $2.5 Million
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on June 8, 2005, the Honorable U.S. District Court Judge Lawrence P. Zatkoff of the U.S. District Court for the Eastern District of Michigan entered an order of summary judgment against Flint, Michigan resident, John Daniel Lee (summary judgment order), and an order of default judgment against Panamanian firms, Marquis Financial Management Systems, Inc. (Marquis FMS) and Marquis Group, Inc. (Marquis Group), and Flint, Michigan resident, David Paul Kelly II (default order). In addition, on June 21, 2005, Judge Zatkoff entered a consent order of permanent injunction against the remaining defendant in the case, Joel Sofia of Glasboro, New Jersey (consent order), thereby concluding the case.
The orders stem from a CFTC complaint filed on October 20, 2003, charging that beginning in January 2000, Marquis FMS, Marquis Group and Lee violated the federal commodity laws by fraudulently soliciting funds from public customers for allegedly low-risk, high-yield “wealth-building opportunities,” while neglecting to mention that customer funds would be used to trade commodity futures and options and that Marquis had never earned a profit. (See CFTC News Release 4857-03, October 23, 2003.)
The orders entered by Judge Zatkoff find that defendants Marquis FMS, Marquis Group, and Lee made false representations to investors, misappropriated investor funds, and failed to register with the CFTC in required capacities. The order permanently prohibits each defendant from further violations of the federal commodity laws and from engaging in any commodity futures- or options-related activity.
In addition, the order requires Marquis FMS and Marquis Group to pay $1,863,910 to defrauded customers, and each of them to pay a civil penalty of $880,000. According to the order, defendant Lee must repay $1,692,501 to customers and pay a civil penalty of $550,000. The order requires defendant Kelly to repay $49,300 of funds he directly received from customers, and to pay a civil penalty of $110,000.
Defendant Sofia consented to the entry of an order against him requiring that he repay $25,162, which will be used in partial repayment of funds lost by customers he solicited. The order also requires Sofia to pay a civil penalty of $10,000. Sofia agreed to the entry of the order without admitting or denying the findings of the order.
The following CFTC Division of enforcement staff were responsible for this case: Susan B. Padove, William Heitner, Robert J. Greenwald, and Rosemary Hollinger.
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The CFTC encourages members of the public to bring to our attention any suspicious activities involving futures or commodity options, including matters involving foreign currency (forex) investments or suspicious Internet websites.
You may contact the CFTC at 1-866-FON-CFTC (1-866-366-2382), visit us at our Customer Protection web page: (www.cftc.gov/cftc/cftccustomer.htm), or fill out our Internet Report Form identifying your concerns (www.cftc.gov/enf/enfform.htm).
In addition, the CFTC publishes a series of Consumer Advisories at http://www.cftc.gov/cftc/cftccustomer.htm#advisory alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.
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