For Release: August 27, 1998
U.S. District Court for the
Northern District of Alabama Enters Consent Order of Preliminary Injunction
Against Two Defendants in Alabama Commodity Pool Fraud
The Commodity Futures Trading Commission (CFTC) announced today that
defendants James Michael Hanks (Hanks) and
Financial Planning Alliance International (FPAI), two defendants
in CFTC v. The ChateauForte Consortium, Inc. et. al. (Case No.
CV-98-N-1755-S), without admitting or denying the allegations of the
Commission's complaint against them, have consented to a preliminary
injunction barring them from violating the antifraud and registration
provisions of the Commodity Exchange Act (Act). Judge Edwin L. Nelson of
the Northern District of Alabama signed the order on August 24, 1998.
The injunction stems from a five-count complaint filed by the Commission
in the Northern District of Alabama on July 7, 1998 (see CFTC News Release
#4166-98, July 13, 1998). The complaint alleged that Hanks
and FPAI participated with other defendants in soliciting
Alabama residents to invest at least $3.4 million in The Millennium
Fund, an unregistered commodity pool. The complaint alleged
antifraud violations, misappropriation of customer funds, unregistered
activity, and various reporting and recordkeeping violations of the Act
against Hanks, FPAI, The
ChateauForte Consortium, Inc., WorldEx, S.A.,
John La Tourette, Dr. Richard E. Busch,
and William E. Amos. The preliminary injunction leaves in
place Judge Nelson's earlier order freezing assets, preserving records, and
appointing a receivership over all the named defendants, including
Hanks and FPAI.
In the pending litigation, the CFTC seeks an order permanently enjoining the defendants from violations of the Act, requiring the defendants to make an accounting, and requiring the defendants to disgorge profits, to make restitution to defrauded customers, and to pay civil fines not exceeding $110,000 per violation ($100,000 for violations before November 27, 1996) or triple the monetary gain to the defendants.