Release: 3899-96 (94-661-Civ. ORL-18)
For Release: April 3, 1996
FLORIDA COURT ISSUES PERMANENT INJUNCTION AGAINST KEITH DOMINICK AND MAIN STREET INVESTMENT GROUP IN 1994 CFTC ANTI-FRAUD ACTION
Dominick Agrees to Pay Restitution to Defrauded Customers and
to be Barred Permanently from the Futures Industry, Among Other Sanctions
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that U.S. District Court Judge G. Kendall Sharp entered a consent order of permanent injunction against Keith Dominick -- individually and d/b/a Keith Dominick Investor Group and Dominion Investments -- and Main Street Investment Group, Inc. (Main Street), a Florida corporation, both of Kissimmee, Florida. The order, entered on March 30, 1996, requires Dominick to pay restitution in the amount of $4,528,237 and bars him from the futures industry, among other sanctions. Neither of these defendants has ever been registered with the CFTC in any capacity.
The court's action, filed on April 1, 1996, stems from an original eight-count civil anti-fraud action that was filed in June 1994 against Keith Dominick and Main Street (see CFTC News Release 3770-94, June 17, 1994 ) alleging that they defrauded commodity pool investors in a manner akin to a Ponzi scheme. The complaint alleged that the defendants violated the Commodity Exchange Act (CEA) and CFTC regulations by, among other things, committing fraud by making misrepresentations, misappropriating investor funds, and providing false statements to investors; acting as commodity pool operators without being registered; converting customer funds to their own use; and commingling the property of a commodity pool with the property of others. Since 1992, Dominick and Main Street solicited and received more than $5.9 million from at least 70 pool participants in Florida, Massachusetts, North Carolina, Texas, and South Carolina, the CFTC charged. On the same day the complaint was filed, the Court entered an ex parte restraining order against Keith Dominick and Main Street freezing their assets. Approximately $150,000 of the funds were frozen.
Complaint Was Amended, Adding Two Other Individual Defendants
On July 11, 1995, the CFTC filed an amended 14-count complaint to the original complaint, adding Rev. Gary A. Smith, pastor of the Heartland Worship Center, Inc. and Jay Blevins, president of the Jeff Blevins Memorial Childrens Fund, both not-for-profit corporations located in Kissimmee, Florida (see CFTC News Release 3857-95, July 11, 1995). The amended complaint repeats the charges in the original complaint, and further charges that Rev. Smith and Blevins solicited investors for Dominick and Main Street and that, in their solicitations, Smith and Blevins made fraudulent misrepresentations to investors (including guaranteeing profits of up to 100 percent and representing that the operation could not lose money) and failed to disclose to investors that Dominick was paying them a commission. Rev. Smith allegedly solicited over $1.5 million from at least 38 investors and Blevins allegedly solicited over $2.5 million from at least 8 investors. The amended complaint alleges that Rev. Smith and Blevins received, respectively, approximately $378,000 and $325,000 in commissions from Dominick.
Trial Has Begun for Remaining Defendants: Rev. Smith and Jay Blevins
The consent order announced today pertains only to Dominick and Main Street. The CFTC's case against Rev. Smith and Blevins went to trial on April 1, 1996. The CFTC is seeking restitution to investors, disgorgement of ill gotten gains, and permanent injunctions against Rev. Smith and Blevins, as well as a civil monetary penalty.
Dominick Agrees to Cooperate Fully with the CFTC's Ongoing Prosecution of the Case
Specifically, to settle the complaint, defendants Dominick and Main Street agreed to:
In addition, Dominick agreed to pay back $4.5 million (plus interest) in restitution to defrauded investors. Because Dominick had dissipated virtually all of the customer funds, the settlement provides for monthly payments of a substantial portion of Dominick's current income, with a provision for increasing the monthly payment should his financial situation change.
Finally, Main Street is permanently enjoined from trading commodities for its own account and Dominick is enjoined from so trading until or unless he pays the full restitution to the investors.
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