Release: #4311-99 (Civ. 3:99-CV-378)
For Release: September 9, 1999
Tennessee Court Enters Consent Order of Permanent Injunction Against Richard G. Belz, Andrew E. Cafferky and Related Companies of Knoxville, Tennessee, in CFTC Enforcement Action Charging Commodity Pool Fraud; Order Requires Defendants to Disgorge $596,000, Plus Post-Judgment Interest, to Defrauded Investors
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) announced the entry of a consent order of permanent injunction on September 3, 1999, in the U.S. District Court for the Eastern District of Tennessee enjoining Richard G. Belz d/b/a Safetrak Group, Ltd., Andrew E. Cafferky, and Blue Chip Information Corporation from violating the anti-fraud, registration, and recordkeeping provisions of the Commodity Exchange Act (CEA) and Commission regulations, and requiring disgorgement of defendants' ill-gotten gains from their unlawful scheme.
The CFTC complaint, which was filed on July 19, 1999, alleges that, from 1994 through 1997, Belz, Cafferky, and Blue Chip fraudulently solicited persons to invest almost $600,000 in a commodity pool called Safetrak Group, Ltd. During that time, Belz and Cafferky, as unregistered pool operators, deceived Safetrak participants by grossly misrepresenting the profitability of pool investments, the trading activity of the pool, and the total amount of funds in the pool, according to the complaint. These deceptions masked Safetrak's trading losses of over $137,000 and the misappropriation of over $459,000 in investor funds, the complaint further charges.
Belz, Cafferky, and Blue Chip, without admitting or denying the CFTC's allegations in the complaint, consented to the entry of a permanent injunction that, among other things:
1) finds that the defendants committed the violations as alleged in the CFTC's complaint and enjoins them from further such violations of the CEA and CFTC regulations;
2) prohibits them from acting as unregistered commodity pool operators (CPOs) or unregistered associated persons of CPOs;
3) permanently bans them from seeking registration with the CFTC or acting in any capacity requiring CFTC registration and from trading on any futures market on behalf of themselves or others; and
4) requires Belz, Cafferky, and Blue Chip, jointly and severally, to disgorge $596,000, plus post-judgment interest, to defrauded investors by making annual payments based on a percentage of their future income over a five-year period.
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