For Release:August 1, 1996
CFTC FILES FOUR-COUNT COMPLAINT AND OBTAINS PRELIMINARY INJUNCTION AGAINST THOMAS J. DENIZ OF MODESTO, CALIFORNIA
Defendant Is Charged with Defrauding More than 40 Commodity Pool
Customers of an Amount in Excess of $500,000
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that on July 31, 1996, U.S. District Judge Oliver W. Wanger of the Eastern District of California in Fresno entered a preliminary injunction against Thomas J. Deniz of Modesto, California. The defendant has never been registered with the CFTC in any capacity.
The court's preliminary injunctive order stems from a four-count civil injunctive complaint filed by the CFTC on July 29, 1996, alleging, among other things, that the defendant violated the anti-fraud provisions of the Commodity Exchange Act (CEA) by cheating and defrauding customers. In addition, Deniz is alleged to have converted customer funds to personal use in connection with acting as an unregistered commodity pool operator. The complaint states that since at least December 1995, Deniz has solicited members of the public, by mail, telephone, and other means of interstate commerce, to participate in a commodity pool.
Specifically, the CFTC complaint alleges that Deniz, through misrepresentations and false statements, obtained in excess of $500,000 from more than 40 customers, while acting illegally as a commodity pool operator. The complaint further alleges that Deniz received investor funds in his own name rather than in the name of the pool, deposited pool funds into accounts in his own name instead of in the name of the pool, and commingled his funds with those of pool participants.
Finally, the complaint alleges that Deniz entered into written investment guarantees with pool participants guaranteeing their principal when he lacked funds to cover these obligations. According to the complaint, Deniz also sent investors monthly statements reporting a return of over 25% per month when his commodity trading account was suffering losses. The complaint further alleges that Deniz represented to investors that their funds would be used for trading commodity futures when, in fact, he used a substantial portion of these funds to pay his personal expenses and to make principal and "interest" payments to other investors.
Preliminary Injunction Freezes Defendant's Assets, Prohibits Destruction of Books and Records, and Requires Deniz To Make an Accounting of His Assets
Without admitting or denying the allegations of the complaint, Deniz consented to the entry of a preliminary injunction which 1) enjoins him from violating provisions of the CEA requiring registration for commodity pool operators and prohibiting fraud and misappropriation of customers' funds, 2) freezes his assets, including accounts in which investors' funds were alleged to have been deposited, 3) prohibits the destruction of his books and records, and 4) orders him to account for all of his assets.
# # #