Release #4178-98 (3:98 Civ.0281AS)
For Release: August 13, 1998
INDIANA COURT ENTERS PRELIMINARY INJUNCTION IN CFTC ENFORCEMENT ACTION AGAINST SIX DEFENDANTS CHARGED WITH COMMODITY POOL FRAUD
CFTC Alleges that the Defendants Defrauded More than 135 Investors in Indiana and Elsewhere Who Had Invested More Than $2.28 Million in Two Commodity Pools
WASHINGTON – The Commodity Futures Trading Commission (CFTC) announced today that U.S. District Court Judge Allen Sharp of the U.S. District Court for the Northern District of Indiana entered a preliminary injunction against Steven D. Hudkins and Market Capital Growth, Inc. (both of Elkhart, Indiana), Carmen J. Field (of South Bend, Indiana), Bart BeMiller (of Wakarusa, Indiana), and Robert J. Riethman (of Fishers, Indiana) arising from their allegedly fraudulent operation of commodity pools, HFI and MCG.
The court's order, entered on July 21, 1998, stems from an eight-count CFTC complaint filed on May 29, 1998, charging the defendants with violating the anti-fraud provisions of the Commodity Exchange Act (CEA) and CFTC regulations by defrauding more than 135 investors in Indiana and elsewhere who had invested more than $2.28 million in two commodity pools. (See CFTC News Release #4152-98, June 8, 1998.)
The injunction was entered pursuant to a motion filed by the CFTC and after testimony was presented at an evidentiary hearing held before U.S. Magistrate Robin D. Pierce.
The order enjoins these five defendants from committing fraud in connection with commodity futures transactions or otherwise engaging in any business activities related to commodity futures trading. The order also continues an asset freeze that had been ordered against defendants Hudkins and Field and requires that each of these defendants file a preliminary accounting with the court covering the period from January 1992 to the present.
Judge Sharp's order approved and confirmed the specific findings of fact made by Magistrate Pierce including that:
-- Hudkins, Field, BeMiller and Riethman each knowingly and intentionally made false representations to investors and potential investors in one of the two commodity pools; -- Hudkins, BeMiller, and MCG had misappropriated MCG investor funds; and
-- Hudkins and Field had misappropriated in excess of $1.7 million received from HFI investors.
Consent Preliminary Injunction Entered Against Defendant Mona L. Smith
Also on July 21, 1998, Judge Sharp entered a consent order of preliminary injunction against the other defendant in the case, Mona L. Smith of South Bend, Indiana, which similarly enjoins Smith from engaging in any business activities related to commodity futures trading, continues the asset freeze against her, and requires her to provide a preliminary accounting.
A September 11, 1998 pretrial conference has been set in this matter.
In its continuing litigation, the CFTC's complaint seeks a permanent injunction enjoining each defendant from further violations of the CEA and CFTC regulations as charged, disgorgement of all ill-gotten gains received and restitution to the defrauded investors, and the imposition of civil monetary penalties of not more than the higher of $100,000 or triple the monetary gain to the respondent for each violation of the Commodity Exchange Act or CFTC regulations committed prior to November 27, 1996 or $110,000 or triple the monetary gain to defendants each violation committed after November 26, 1996.