Release: #4166-98 (CV-98-1755-S)
For Release: July 13, 1998
CFTC FILES COMPLAINT IN ALABAMA AND OBTAINS AN ASSET FREEZE AGAINST SEVEN DEFENDANTS ACCUSED OF COMMODITY FRAUD
CFTC Names John La Tourette, Dr. Richard E. Busch, James Michael Hanks, William E. Amos, Financial Planning Alliance International, WorldEx, S.A., & ChateauForte Consortium, Inc.
WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced the filing of a five-count complaint on July 7, 1998, in the U.S. District Court for the Northern District of Alabama seeking emergency relief against seven defendants charged with running a fraudulent commodity pool scheme in violation of the anti-fraud, registration, and recordkeeping provisions of the Commodity Exchange Act (CEA) and CFTC regulations.
The defendants named in CFTC complaint are: ChateauForte Consortium, Inc. (a Panamanian firm doing business in the United States) and its three directors, John La Tourette (a resident of Panama), William E. Amos (of Annapolis, Maryland), and Dr. Richard E. Busch (of Fort Wayne, Indiana); WorldEx, S.A. (a Panamanian firm owned by Dr. Busch doing business in the United States); and Financial Planning Alliance International (of Birmingham, Alabama) and its owner, James Michael Hanks (of Birmingham, Alabama).
On July 7, 1998, the Honorable Judge Edwin Nelson entered a statutory restraining order freezing the assets of defendants, prohibiting them from destroying any of their books and records, and requiring them to make their books and records available for inspection and copying. Judge Nelson set a preliminary injunction hearing for August 6, 1998.
The CFTC's complaint alleges that the defendants defrauded at least eight investors in Alabama and elsewhere who had invested more than $3.4 million over the past two years in a purported off-shore commodity pool called the Millennium Fund. The complaint charges that the defendants violated the CEA by, among other things:
· misappropriating funds received from investors;
· commingling commodity pool funds with non-pool funds in accounts under their control;
· misrepresenting their ability to operate a commodity pool in the U.S.;
· misrepresenting the potential for profit and risk of loss associated with participating in a commodity pool;
· failing to register as a commodity pool operator and associated persons of a commodity pool operator; and
· failing to provide required reports to investors and the CFTC.
The complaint asks the court to enjoin each defendant from further violations of the CEA and CFTC regulations, and seeks disgorgement of all benefits received, restitution to the defrauded investors, and civil monetary penalties.
The CFTC appreciates the assistance and cooperation of the State of Alabama Securities Commission in connection with bringing this action.