For Release: May 19, 1999
CFTC Obtains Preliminary Injunctions Against All Defendants, EuroPacific Equity & Capital Management, Ltd., Tortola Corporation Company, Ltd., International Investment Group, Ltd., David Michael Loyd, and Richard Tichy, in CFTC Enforcement Action Alleging Fraud
Court Orders Preliminary Injunctions in CFTC Enforcement Action Alleging At Least 10 Individuals Invested Over $800,000 in the Defendants' Commodity Pool Scam
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today the filing of a five-count complaint on May 5, 1999, in the U.S. District Court for the Southern District of Florida seeking emergency relief against EuroPacific Equity and Capital Management, Ltd. (EuroPacific), a corporation registered in the British Virgin Islands and in Florida; Tortola Corporation Company, Ltd. (Tortola), an international corporation registered in the British Virgin Islands; International Investment Group, Ltd. (IIG); David Michael Loyd of Plantation, Florida; and Richard Tichy of Parkland, Florida.
On May 14, 1999, United States District Judge William P. Dimitrouleas entered consent orders of preliminary injunction against all the defendants. The consent orders enjoin the defendants from further violating the provisions of the Commodity Exchange Act (CEA) and the CFTC regulations with which they were charged, from engaging in any commodity futures-related activity, and continue the terms and conditions of a May 5, 1999, freeze order. The consent orders also continue Marsha L. Lyons, Esq. as receiver (see below).
The CFTC's complaint alleges that EuroPacific, Tortola, IIG, Loyd, and Tichy fraudulently solicited at least 10 individuals from the United States and Canada to invest over $800,000 in a commodity pool variously called the EuroPacific or IIG Fund. The complaint further alleges that the vast majority of investor funds were misappropriated by transferring them to persons and entities unrelated to any commodity pool, and by using them to pay for personal expenses. The complaint also alleges that the defendants violated the antifraud, registration, and disclosure and reporting requirements of the CEA and CFTC regulations.
The fraudulent conduct with which the defendants are charged includes:
-- Misappropriating investor funds;
-- Misrepresenting the profit potential of commodity futures transactions;
-- Misrepresenting the amount of investor funds that would be invested in commodity futures contracts; and
-- Sending false account statements and reports to investors that reported profits when, in fact, the defendants lost or misappropriated almost all the investor money.
Court Order Froze Defendants' Assets
Previously, on May 5, 1999, Judge Dimitrouleas entered a statutory restraining order against EuroPacific, Tortola, IIG, Loyd, and Tichy. The order froze the defendants' assets, prohibited the destruction of books and records, required that books and records be made available for inspection and copying, and appointed Marsha L. Lyons, Esq. as temporary receiver over all the defendants.
In the pending litigation, the CFTC also seeks an order permanently enjoining the defendants from violations of the CEA and requiring the defendants to make an accounting, to disgorge profits, to make restitution to defrauded customers, and to pay civil penalties not exceeding $110,000 per violation or triple the monetary gain to the defendants.
This action was the sixth action filed by the Commission since March 1999 seeking emergency relief against a commodity pool operator who the Commission alleged was engaged in fraudulent conduct. In all of these actions, the court granted, among other things, a statutory restraining order against the defendants. CFTC v. Mark E. Chulik dba Westgate Partners, dba MEC Management, dba MEC Capital Management, CV99-02412GHK (C.D. Ca. March 11, 1999); CFTC v. Joseph P. McGivney, Sr., Edwin A. Koziol, et al., 99-Civ. 2375 (N.D. Ill. April 12, 1999); CFTC v. Donald Trivette, 5:99 cv 59-v (W. Dist. of N.C. April 14, 1999); CFTC v. Donald E. James and Donald James, Inc., 99-Civ-0967 (N.D. Ga. April 15, 1999); CFTC v. Edwin Jay Sheldon, 1:99-CV-138 (E.D. Tenn. April 28, 1999).
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