U.S. COMMODITY FUTURES TRADING COMMISSION CHARGES OXNARD, CALIFORNIA RESIDENT BRETT E. LOVETT WITH DEFRAUDING COMMODITY FUTURES CUSTOMERS
CFTC Alleges Lovett Cheated Fellow Church Member; Federal Court Issues Order Freezing Defendant’s Assets
WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of an enforcement action on July 13, 2005, in the United States District Court for the Central District of California against Brett E. Lovett, individually and doing business as Northwest Asset Fund of Oxnard, California. The CFTC's action charges Lovett with fraudulently soliciting at least $175,000 from one member of his church, purportedly to trade commodity futures through an account in his own name, and with misappropriating a portion of those funds and creating false statements to conceal the fraud. (CFTC v. Brett E. Lovett, C.D. Cal, Case No. CV05-5074 GHK (MANx).)
On July 15, 2005, the Honorable Judge George H. King issued an order freezing the assets of the defendant and prohibiting the destruction of books and records. Judge King has set a hearing on the CFTC’s motion for preliminary injunction in the matter for July 29, 3005.
Specifically, the CFTC complaint alleges that, since at least September 2004, Lovett used fraudulent promises of low risk and high returns to solicit and accept at least $175,000 in customer funds.
As alleged, Lovett claimed to at least one fellow church member that he would place the funds in a low-risk investment that would provide the customer with $1,000 in interest per month with no risk of losing the principal.
According to the complaint, however, Lovett failed to inform the customer that some of the funds would be used to trade commodity futures contracts, and also failed to disclose to the customer the risks involved in trading commodity futures contracts. The complaint also alleges that Lovett misappropriated at least $55,000 of these funds and created false statements to conceal his fraud.
In its ongoing litigation, the CFTC is seeking preliminary and permanent injunctive relief, repayment of ill-gotten gains and customer losses, and payment of monetary penalties.
The following Division of Enforcement staff members are responsible for this case: Jennifer S. Diamond, Susan J. Gradman, Judith McCorkle, Cynthia Cannon, Scott R. Williamson, Rosemary Hollinger, and Joan Manley.
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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 investments or suspicious Internet web sites.
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 alerting the public to warning signs of possible fraudulent activity and offering precautions individuals should take before committing funds.
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