Release: 4278-99 (7:96-cv-61 (WDO))
For Release: June 8, 1999
Georgia Court Orders Payment of Over $11.5 Million and Permanent Injunction In Default Order Against Estate of Donald B. Chancey, Southeastern Venture Partners Group, in Commodity Pool Fraud Case
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced today that the estate of Donald B. Chancey and Southeastern Venture Partners Group, Inc. (SVPG) have been ordered to pay over $11.5 million as part of an order of default judgment entered against them for violations of the anti-fraud and registration provisions of the Commodity Exchange Act (CEA).
The order bars Chancey's estate and Southeastern from soliciting new customers or customer funds in connection with commodities trading, and orders them to pay restitution to customers of over $2.9 million and a civil monetary penalty of over $8.8 million. Judge Wilbur D. Owens, Jr. of the Middle District of Georgia signed the order on May 13, 1999.
The court's action stems from a six-count civil injunctive complaint, filed on July 1, 1996 (see CFTC News Release 3929-96, August 6, 1996), charging, among other things, that the defendants violated the anti-fraud provisions of the CEA and CFTC regulations. Specifically, the CFTC complaint alleged that SVPG, a commodity pool operator, and Donald B. Chancey, SVPG's chief executive officer, fraudulently solicited at least 19 customers to invest more than $3 million in an unregistered commodity pool and that Chancey fled with customer funds and did not respond to the CFTC's complaint. In addition, the complaint charged that Chancey and SVPG operated an unregistered commodity pool and violated numerous disclosure, reporting, and record keeping requirements.
On the same day the complaint was filed, the court froze the defendants' assets, appointed a receiver to take charge of the business operations, and issued a Writ of Ne Exeat, a court order directing the U.S. Marshals Service to locate Chancey and hold him in custody until he posted a $3 million bond. As part of the effort to locate Chancey, the CFTC posted his photograph on its Worldwide Web site, and sought information on his whereabouts from members of the public (see CFTC News Release 3956-96, October 15, 1996). The FBI also indicted Chancey on October 22, 1997. In June 1998, Chancey's body was found in a Louisiana cabin with a gunshot wound. The coroner for the State of Louisiana concluded that it was an apparent suicide.
The court's order of default judgment also directs that all proceeds obtained from the defendants be distributed in accordance with a proposal previously submitted by the court-appointed receiver.
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