Release: 4012-97 (Civ 97-1360)
For Release: April 22, 1997
EX PARTE ASSET FREEZE ORDER ISSUED BY CALIFORNIA COURT IN CFTC ENFORCEMENT ACTION AGAINST AC TRADING GROUP, INC.; AC TRADING GROUP FUND, L.P.; AND TWO INDIVIDUALS, ALL OF NAPA, CALIFORNIA
WASHINGTON - The Commodity Futures Trading Commission (CFTC) announced today that the Honorable Maxine M. Chesney of the U.S. District Court for the Northern District of California entered an ex parte asset freeze order against AC Trading Group, Inc., AC Trading Group Fund, L.P., Alexis Carles, and Fred Eric DeJong of Napa, California. The court's order freezes the defendants' assets and prohibits them from destroying books and records and from denying CFTC representatives access to such records.
Defendants Allegedly Misappropriated More than $300,000
in Investors' Funds and Used the Funds for Personal Items
The court's action stems from a three-count civil complaint filed on April 17, 1997, alleging that, since early 1996, the defendants have been engaged in a fraudulent scheme whereby they have falsely represented to prospective commodity pool investors that their commodity futures trading has been highly profitable, when in fact they have sustained at least $1.7 million in trading losses.
The CFTC complaint further alleges that, in order to induce their investors to make additional investments, and in order to dissuade them from withdrawing their account balances, the defendants have sent false, written account statements to those investors reflecting profitable trading, when in fact the defendants' commodities trading has sustained massive losses. According to the CFTC's complaint, the defendants have recently misappropriated more than $300,000 in investors' funds and used those funds for such personal items as jewelry, limousine rentals, and a luxury automobile.
Hearing on a Preliminary Injunction is Scheduled for April 28th
A court hearing on the issuance of a preliminary injunction is set for April 28, 1997. In its litigation against the defendants, the CFTC is seeking preliminary and permanent civil injunctions in addition to other remedial relief, including cease and desist orders, an accounting, disgorgement of unlawfully obtained benefits, and civil penalties to be assessed by the court separately against each defendant in amounts not to exceed the higher of $110,000 or triple the monetary gain to defendants for each violation of the CEA.