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• CFTC v. Raleigh Capital Mgmt, Inc., et al.
  
  On October 28, 2009, the Commission filed a civil injunctive action charging registered CPO Raleigh Capital Management, Inc. (RCM) and its AP and sole principal, Richmond Hamilton, Jr., charging them with commodity pool fraud. Specifically, the complaint alleges that defendants misappropriated more than $1 million since May 2004 from the Raleigh Fund, LP., an $8.3 million commodity pool organized by Hamilton in 1987. The complaint also alleges that Hamilton with making false statements to the National Futures Association in the course of the National Futures Association’s audit of the Raleigh Fund, L.P. about the extent of his personal bank accounts and his administration of the fund. The Commission received cooperation from the National Futures Association in connection with this matter. CFTC v. Raleigh Capital Mgmt, Inc., et al., No. 1:09-cv-06780 (N.D. Ill. filed Oct. 28, 2009).
  
  
• CFTC v. Owen
  
  On October 30, 2009, the Commission filed a civil injunctive action charging David A. Owen with commodity pool fraud. Specifically, the complaint alleges that Owen, holding himself out as a certified public accountant, tax attorney and financial advisor, fraudulently solicited at least $2.5 million from at least 9 individuals to participate in commodity futures pools that he operated under the name of Oasis Futures. The complaint further alleges that Owen misappropriated approximately $800,000 of customer funds for his personal use and to return funds to pool participants in the manner of a Ponzi scheme. Owen allegedly did not maintain pool trading accounts and lost more than $1.6 million trading commodity futures in his personal trading accounts. The complaint also alleges that Owen failed to disclose his prior criminal convictions for fraud. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. CFTC v. Owen, No. 3:09cv484 (N.D. Fla. filed Oct. 29, 2009).
  
  
• CFTC v. Prestige Ventures Corp., et al.
  
  On November 20, 2009, the Commission filed a civil injunctive action charging Kenneth W. Lee, Simon Yang, Prestige Ventures Corp. (Prestige) and Federated Management Group Inc. (FMG) with fraud involving a pool that had at least $8.7 million in assets and 140 participants. Specifically, the complaint alleges that, since at least July 2003, defendants fraudulently solicited participants and issued false statements to them, which consistently showed monthly profits generated by Lee’s purportedly successful trading of commodity futures, forex and other instruments. However, Lee sustained net losses of approximately $4.3 million trading primarily commodity futures and forex. In soliciting prospective pool participants, defendants allegedly failed to disclose, among other things, that Lee committed two felonies, served prison time and had a related $3 million civil judgment against him, and that defendants were under investigation by federal authorities. Lee, Prestige and FMG also allegedly misused pool participant funds to pay off other pool participants, in the manner of a Ponzi scheme, and for personal use, such as paying for cars and yacht fees and funneling money to family members. The complaint further alleges that Yang submitted a false declaration to the Commission in response to a Commission subpoena requiring the production of documents and information relating to Yang, Lee, FMG and others. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the Oklahoma Department of Securities in connection with this matter. CFTC v. Prestige Ventures Corp., et al., No. 5:09-cv-01284-R (W.D. Okla. filed Nov. 20, 2009).
  
  
• CFTC v. Capital Funding Consultants, L.L.C., et al.
  
  On November 20, 2009, the Commission filed a civil injunctive action charging William Charles Guidry, Matthew Brian Pizzolato, and Capital Funding Consultants, L.L.C. (Capital Funding) charging them with pool fraud involving the solicitation of $19.5 million from about 160 mostly elderly investors to trade in purportedly safe, secure investments. The complaint alleges that Pizzolato, however, did not use investor funds as he had represented, but rather gave more than $2 million of investor funds to Guidry, whose trading resulted in losses that were not disclosed to investors. The complaint further alleges that Guidry and Capital Funding misappropriated at least $135,000 of these investor funds for personal purposes, while using some funds to trade commodity futures in accounts owned by Capital Funding. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the Louisiana Office of Financial Institutions in connection with this matter. CFTC v. Capital Funding Consultants, L.L.C., et al., No. 2:09-cv-07409-MVL-JCW (E.D. La. filed Nov. 20, 2009).
  
  
• CFTC v. Nolan, et al.
  
  On January 25, 2010, the Commission filed a civil injunctive action charging Jay C. Nolan and his company, Lodge Capital Group, LLC (Lodge Capital), with commodity pool fraud involving fraudulent solicitation of approximately $3.9 million from at least five pool customers. Specifically, the complaint alleges that from at least December 2004 to the present, the defendants fraudulently solicited participants by misrepresenting and failing to disclose the profitability of the pool and the performance of the participants’ investments in the pool. The complaint further alleges that Nolan misappropriated some participant funds and defendants sent false account statements to participants that misrepresented the value of the participants’ interests in the commodity pool and the assets and liabilities of the pool. On January 26, 2010, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the Federal Bureau of Investigation and the United States Attorney’s Office for the Northern District of Illinois in connection with this matter. CFTC v. Nolan, et al., Civil No. 1:10-cv-00493 (N.D. Ill. filed Jan. 25, 2010).
  
  
• In re Riley and Pressio Capital Mgmt, LP
  
  On February 18, 2010, the Commission simultaneously filed and settled an administrative enforcement action against Craig A. Riley and his firm, Pressio Capital Management, LP (PCM), finding that they engaged in commodity pool fraud involving the solicitation of than $3 million from approximately 19 individuals. Specifically, the order finds that, beginning in the fall of 2006 and continuing through February 2008, respondents fraudulently operated a commodity pool, known as Pressio LP, which traded a variety of instruments, including commodity futures contracts. Respondents misrepresented that the pool would be a conservative, diversified balanced asset fund. In fact, Riley lost approximately $2.5 million almost exclusively trading commodity futures and misappropriated the remainder of the funds for personal and business expenses and for paying back existing pool participants in the manner of a Ponzi scheme. The order further finds that the respondents issued false account statements to pool participants to conceal the trading losses and misappropriations. In a related criminal action, on January 12, 2009, Riley pled guilty to fraud in connection with a scheme to defraud or obtain money or property by means of materially false pretenses, representations or promises. Riley is currently serving a 41-month sentence. Criminal restitution was set at $3,044,384. (United States v. Riley, Case No. SA CR 09-0001 (C.D. Cal. filed Jan. 12, 2009)). The Commission assessed sanctions including: a cease and desist order; permanent trading and registration bans; and a joint and several $1 million civil monetary penalty. The Commission received cooperation from the U.S. Attorney’s Office for the Central District of California in connection with this matter. In re Riley and Pressio Capital Mgmt, LP, CFTC Docket No. 10-06 (CFTC filed Feb. 18, 2010).
  
  
• CFTC v. Claudio Aliaga, et al.
  
  On April 6, 2010, the Commission filed a civil injunctive action charging Claudio Aliaga and his company, CMA Capital Management, LLC with operating a Ponzi scheme involving the fraudulent solicitation of at least $4.5 million from at least 125 individuals to invest in forex managed accounts and/or a pooled investment. Specifically, the Commission’s complaint charges that, since at least March 2007, during solicitations of prospective customers, Aliaga made fraudulent misrepresentations and omissions of material fact, including: 1) stating that he was a successful forex trader; 2) guaranteeing a two to three percent monthly return on funds invested; and 3) guaranteeing that there would be no risk to principal invested, according to the complaint. Aliaga was also charged with failing to disclose that not all customer funds were used to trade forex. According to the complaint, only approximately $1.9 million of the approximately $4.5 million solicited from customers was transferred into forex trading accounts. Aliaga’s trading resulted in overall losses of approximately $673,000. Finally, the complaint charged that Aliaga misappropriated customer funds to benefit himself, his wife and another related business entity. On April 9, 2010, the court entered a statutory restraining order freezing assets and preserving books and records. CFTC v. Claudio Aliaga, et al., No. 1:10-cv-21074-MGC (S.D. Fla. filed Apr. 6, 2010).
  
  
• CFTC v. Richard D. Theye, et al.
  
  On June 17, 2010, the Commission filed a civil injunctive action against Richard D. Theye and his company Micend Capital Management, Inc. charging them with a multi-million Ponzi fraud. Specifically, the complaint charges that, since at least December 2005, Theye fraudulently solicited members of the general public to invest millions of dollars in two commodity pools, RYCO Group, LLC and First RYCO, LLC, and encouraged prospective investors to roll over their 401(K)s, IRAs and pension funds into the RYCO pools. Theye was also alleged to have solicited investors through false representations during face to face meetings at his church in Austin and in advertising the RYCO pools’ purported historical profits trading commodity futures. Theye’s commodity futures trading resulted in losses of hundreds of thousands of dollars since 2006. The CFTC’s complaint further alleged that to further the scheme, Theye issued fictitious account statements showing trading profits when, in fact, no profits were realized. Theye employed a separate scheme to defraud a Micind investor whereby he entered into an agreement on behalf of Micind to trade for the customer in exchange for a capital contribution, according to the complaint. However, The complaint charges that they never traded for the customer, issued the customer fictitious statements showing profitable trading, and used the customer’s funds to finance his Ponzi scheme. The Commission received cooperation in this case from the U.S. Attorney’s Office for the Western District of Texas, the Federal Bureau of Investigation and the Texas State Securities Board. CFTC v. Richard D. Theye, et al., No. 1:10-cv-00385-SS (W.D. Tex. filed June 1, 2010).
  
  
• CFTC v. Richard Milton, et al.
  
  On June 22, 2010, the Commission filed a civil injunctive action charging Phillip Milton, Gregory Center, William Center, and their company, Trade LLC, with operating a Ponzi scheme involving approximately $28 million and at least 900 persons in connection with the Trade LLC commodity pool. Specifically, the complaint alleges that, from at least May 2007 through July 2009, defendants committed solicitation fraud and misappropriated pool funds. To induce new pool investors, the complaint alleges that the defendants claimed to be successful commodity futures traders and touted the pool as having a profitable trading record. Despite taking in at least $28 million from investors, the defendants were not successful traders and placed only $15 million of investors’ funds in trading accounts at the pool, which consistently lost money during all but two months of its operation. The defendants also allegedly misappropriated at least $9.6 million for their personal use and to continue the scam. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the Securities and Exchange Commission in connection with this matter. CFTC v. Richard Milton, et al., No. 9:10-CV-80738-KAM (S.D. Fla. filed June 22, 2010).
  
  
• In re Pipenhagen, et al.
  
  On August 30, 2010, the Commission simultaneously filed and settled an administrative enforcement action against Terrence R. Pipenhagen and his companies, TRP Advisory Group, Inc. (TRP) and Traders East, Inc., finding that they engaged in commodity pool and managed account fraud. Specifically, the order finds that, from mid-2002 through August 2006, Pipenhagen, through his companies, defrauded customers by claiming he could provide customers with consistent gains and achieve high returns and sending them false account statements to conceal trading losses and to prevent customers from withdrawing their investments. The order found that Pipenhagen solicited at least $450,000 from at least nine individuals he knew from working as an insurance and securities salesman. The order further found that TRP and Pipenhagen failed to register with the Commission as a CPO, respectively, and failed to comply with regulatory requirements related to operating commodity pools. The Commission assessed sanctions including: a cease and desist order; permanent trading and registration bans; and a joint and several $150,000 civil monetary penalty. In re Pipenhagen, et al., CFTC Docket No. 10-16 (CFTC filed Aug. 30, 2010).
  
  
• CFTC v. Joseph A. Dawson, et al.
  
  On July 20, 2010, the Commission filed a civil injunctive action charging Joseph A. Dawson and his company, Dawson Trading LLC, with commodity pool fraud. Specifically, the complaint alleges that defendants fraudulently solicited pool participants by claiming to be successful traders when, in fact, the defendants lost nearly $1 million trading commodity futures and securities between July 2005 and December 2009. The complaint also alleges that defendants misappropriated more than $2 million of pool participant funds for personal use and sent pool participants account statements that misrepresented the profitability of their accounts. In one instance Dawson allegedly represented that a pool participant’s quarterly trading gain for the second quarter of 2007 was nearly $100,000; however, the defendants lost approximately $454,000 trading during that quarter. The complaint also charges Dawson Trading with failing to register as a CPO and Dawson with failing to register as an AP of a CPO. The CFTC received cooperation from the U.S. Attorney’s Office for the Northern District of Illinois, the Federal Bureau of Investigation and the Securities and Exchange Commission in this action. CFTC v. Joseph A. Dawson, et al., No. 1:10-cv-04510, (N.D. Ill. filed July 20, 2010).
  
  
• CFTC v. Autry, et al.
  
  On September 21, 2010, the Commission filed a civil injunctive action charging Joseph L. Autry, Jr. and his company, Autry Capital Management LLC (ACM), with fraudulently operating a Ponzi scheme from at least May 2008 until January 2010 that solicited and received approximately $265,200 from seven customers to trade commodity futures contracts. Specifically, the Commission alleges that Autry: misappropriated more than $176,000 of pooled customer funds to pay his personal debts and expenses; and paid supposed returns to customers using the customer’s own funds or funds of new customers. Autry also allegedly used misappropriated customer funds to pay himself fees and commissions based on fabricated trading profits. To conceal the misappropriation, Autry sent ACM customers false statements showing bogus trading profits when he knew no such profits existed, the complaint charges. The Commission received cooperation from the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Southern District of Georgia in connection with this matter. CFTC v. Autry, et al., No. CV610 084 (S.D. Ga. filed Sept. 21, 2010).
  
  

• CFTC v. Enrique F. Villalba, Jr., et al.
  
  On March 29, 2010, the Commission filed a civil injunctive action charging Enrique F. Villalba, Jr. and his firm, Money Market Alternative, LP (MMA), with operating a $37.5 million commodity futures Ponzi scheme. Specifically, the complaint alleges that, beginning in at least 1996 and continuing through at least November 2009, defendants misappropriated at least $3 million in investor funds to finance Villalba’s coffee business and to purchase real estate among other things. In addition, the defendants allegedly used more than $7 million of investor funds to make Ponzi payments to new and existing investors. Specifically, the complaint charged that Villalba fraudulently solicited funds from members of the general public to trade futures predominantly related to the S&P 500 and opened a futures trading account in the name of MMA as early as 1998. Villalba and MMA deposited more than $23.2 million in this account and had net losses of more than $17 million. Despite massive trading losses, Villalba and MMA allegedly sent monthly, quarterly and annual statements to investors that showed purported consistent profits. Villalba and MMA also made numerous verbal statements to investors and prospective investors about the purported successful performance of their futures trading. Most, if not all, of these written and oral statements were false, the complaint alleged. Finally, from at least 2000 through 2008, the defendants allegedly created and provided at least one investor with sporadic fabricated monthly futures commission merchant statements for several different purported accounts. The Commission received cooperation from the United States Attorney’s Office for the Northern District of Ohio and the Securities and Exchange Commission in connection with this matter. CFTC v. Enrique F. Villalba, Jr., et al. No, 5:10-cv-00647 (N.D. Ohio Mar. 29, 2010).
  
  
• CFTC v. Jeffrey Shalhoub, et al.
  
  On May 17, 2010, the Commission filed a civil injunctive action charging Jeffrey Shalhoub and his company, Jeff Shalhoub Investments (JSI), with operating a commodity futures Ponzi scheme. Specifically, the Commission charged Shalhoub with soliciting approximately $300,000 from at least 12 of his ex-wife’s friends and family to trade futures. The Commission further alleges that Shalhoub and JSI commingled customer money with Shalhoub’s personal funds and that Shalhoub misappropriated at least $154,500 of customer funds for his personal use. As alleged, Shalhoub falsely: promised customers monthly returns ranging from 10 to 36 percent, while representing that customers’ original investment could be returned at any time; and that the return was produced by his successful trading. Finally, the complaint alleges that, to conceal and perpetuate the fraud, Shalhoub provided false account statements to customers, misrepresenting that their accounts were increasing by as much as 5.2 percent per week when, in fact, the accounts were losing money every month. CFTC v. Jeffrey Shaloub, et al., No. 10 2242 (E.D.N.Y. filed May 17, 2010).
  
  
• CFTC v. Ruben Gonzalez, et al.
  
  On May 20, 2010, the Commission filed a civil injunctive action charging Ruben Gonzalez, Jose C. Naranjo, and their company, New Golden Investment Group, LLC (NGI), with fraud and misappropriation in connection with a multi-million dollar Ponzi scheme. Specifically, the complaint alleges that, since at least August 2008, defendants fraudulently solicited and accepted approximately $3.65 million from at least 165 members of the Los Angeles area Spanish-speaking community for various investments, including commodity futures trading. The defendants falsely claimed to customers that they would double their money within a year in oil, gold, silver and other commodities. Gonzalez and Naranjo were also charged with misappropriating hundreds of thousands of dollars of investor funds. According to the complaint, Gonzalez, Naranjo and NGI falsely presented NGI as a successful trading company by displaying trading software on NGI’s office computers to make it appear to customers and prospective customers that NGI was engaged in electronic commodity futures trading. In reality, the complaint alleged, NGI did not trade commodity futures for customers and did not make any of their advertised profits. The complaint further alleges that Gonzalez and Naranjo misappropriated investor funds by transferring hundreds of thousands of dollars from NGI’s business account to their personal accounts. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the United States Attorney’s Office for the Central District of California and the Federal Bureau of Investigation in connection with this matter. CFTC v. Ruben Gonzalez, et al., No. CV 10 3834 (C.D. Ca. May 20, 2010).

• In re Gage’s Fertilizer & Grain, Inc., et al.
  
  On July 22, 2010, the Commission simultaneously filed and settled an administrative enforcement action against Gage’s Fertilizer & Grain, Inc. (Gage’s Fertilizer) and Steven W. Gage finding that they failed to register as an FCM and AP, respectively. Gage’s Fertilizer is a grain elevator and farm supply company and Gage is the company’s president, director and majority owner. The order finds that, from at least January 2004 to December 2008, Gage’s Fertilizer acted as an FCM and Gage acted as an AP by soliciting and accepting orders for the purchase and sale of domestic, exchange-traded commodity option contracts. The order further finds that Gage’s Fertilizer failed to properly account for or segregate customer funds relating to such transactions. The Commission assessed sanctions, including: a cease and desist order; a joint and several $75,000 civil penalty; and an order to disgorge $100,000 of ill-gotten gains. In re Gage’s Fertilizer & Grain, Inc., et al., CFTC Docket No. 10-13 (CFTC filed July 22, 2010).

• CFTC v. Cook, et al.
  
  On November 23, 2009, the Commission filed a civil injunctive action charging Trevor G. Cook, Patrick Kiley, and their companies, Oxford Global Advisors, LLC, Oxford Global Partners, LLC, Universal Brokerage FX and Universal Brokerage FX Diversified charging them with an off-exchange forex scheme that defrauded hundreds of customers of more than $190 million. Specifically, the complaint alleges that the defendants solicited customers to trade forex by fraudulently claiming that, since 2003, they earned more than 10 percent annual profits and sustained no losses. The defendants also claimed that customers’ funds were placed in managed, segregated accounts with Crown Forex, SA, a Swiss company majority-owned by Cook since December, 2008. Instead, defendants misappropriated customer funds and continued to solicit and accept funds until July 2009—even though the Swiss Financial Market Supervisory Authority (FINMA) placed Crown Forex into receivership in December 2008, and into bankruptcy in May 2009. The defendants perpetuated their fraud by providing customers with account statements falsely depicting that their accounts were earning from 10 to 12 percent annual profits. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the FINMA, the U.S. Securities and Exchange Commission and the U.S. Attorney’s Office in Minneapolis in connection with this matter. CFTC v. Cook, et al., No. 09sc3332 (MJD/JJK) (D. Min. filed Nov. 23, 2009).
  
  
• CFTC v. Trader’s Int’l Return Network, et al.
  
  On October 14, 2009, the Commission filed a civil injunctive action charging Trader’s International Return Network (TIRN) and its president, David Merrick, charging them with solicitation fraud and misappropriation of customer funds involving a purported forex investment. Specifically, the complaint alleges that TIRN represented itself as a “private investment club” that provided various investment services, including forex investing, through its purported Real Century forex trading program. The complaint further alleges that defendants accepted at least $16.4 million from customers to participate in TIRN’s investment program; however, no customer funds were invested as described on the TIRN Web site and in TIRN’s written materials, and defendants misappropriated customer funds for various other purposes, including diverting more than $2 million for Merrick’s personal use. The Commission received cooperation from the U.S. Securities and Exchange Commission and the U.S. Attorney’s Office in connection with this matter. CFTC v. Trader’s Int’l Return Network, et al., No. 6:09-cv-1743-MSS-GJK (M.D. Fla. filed Oct. 14, 2009).
  
  
• CFTC v. Smith, et al.
  
  On February 23, 2010, the Commission filed a civil injunctive action charging Ronald W. Smith, Jr., d/b/a Safeguard 3030 Investment Club, with operating an off-exchange forex Ponzi scheme involving the fraudulent solicitation of at least $800,000 from at least 34 customers, which he misappropriated. Specifically, the complaint alleges that, since at least January, 2009, Smith fraudulently operated a forex trading scam, luring customers to trade managed forex accounts or pooled forex investments by claiming forex trading success and offering promises of quick and large returns, such as 30 percent in 30 days. Smith allegedly claimed that 95 percent of his trades are winning trades. Smith also used a Web site and a video posting on www.youtube.com to solicit customers, according to the complaint. In reality, however, Smith used little, if any, of the funds to trade forex. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. CFTC v. Smith, et al., No. 1:10CV00009 (W.D. Va. filed Feb. 23, 2010).
  
  
• CFTC v. C & R Fin., Inc., et al.
  
  On March 4, 2010, the Commission filed a civil injunctive action charging Willie L. Cloud, Jr. and his investment company, C & R Financial, Inc., with operating a forex Ponzi scheme. Specifically, the complaint alleges that, since at least April 2008, defendants fraudulently solicited at least $200,000 from individuals for the sole purpose of trading forex with promises of doubling or tripling their investments within a year through forex trading gains. However, rather than an opening FCM accounts in the name of the customers, as promised, defendants opened an account in Cloud’s name, deposited only a portion of customers’ funds into the account and misappropriated at least $75,000 of customer funds for personal use. The complaint further alleges that defendants sent false account statements to customers showing large profits, when, in fact, defendants’ forex trading resulted in substantial losses. CFTC v. C & R Fin., Inc., et al., No. 4:10-cv-00706 (S.D. Tex. filed Mar. 4, 2010).
  
  
• CFTC v. Yellowstone Partners, Inc., et al.
  
  On March 9, 2010, the Commission filed a civil injunctive action charging Dennis Todd Hagemann and Yellowstone Partners, Inc. with operating a forex Ponzi scheme involving the fraudulent solicitation of at least $700,000 from at least nine individuals. Specifically, the complaint alleges that, from at least September 2009 to the date the complaint was filed, the defendants fraudulently solicited customers by making: false claims regarding Hagemann’s experience and success in trading forex; and false promises of quick and large profits, including that Yellowstone Partners was returning 100 to 300 percent to customers “every couple of months.” The complaint further alleges that Hagemann also falsely claimed to be registered with the National Futures Association and to have employees registered with the National Futures Association. According to the complaint, only $200,000 of the customers’ funds was deposited into forex trading accounts, and the defendants lost nearly all of that money trading forex. By November 2009, as alleged, Hagemann stopped trading the Yellowstone accounts and misappropriated the remaining $500,000 in customer funds for personal use or to make purported profit payments or return customers’ principal in a manner similar to a Ponzi scheme. Hagemann was arrested on March 10, 2010, by North Carolina authorities based on charges by the North Carolina Securities Division. On March 10, 2010, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the North Carolina Department of the Secretary of State, Securities Division in connection with this matter. CFTC v. Yellowstone Partners, Inc., et al., No. 5:10-CV-85-FL (E.D.N.C. filed Mar. 9, 2010).
  
  
• CFTC v. Weber
  
  On March 9, 2010, the Commission filed a civil injunctive action charging Helmut H. Weber d/b/a Weber Capital Management (WCM) with fraud involving an off-exchange forex scheme. Specifically, the complaint alleges that, from at least June 2008 through January 2009, Weber fraudulently solicited at least $280,000 from customers by: falsely claiming that he was a successful and experienced forex trader; promising profits of three percent to 10 percent monthly on investments; and falsely claiming that WCM was registered with the National Futures Association and the Commission. The complaint also alleges that, contrary to Weber’s representations, only a fraction of customer funds were actually traded and that the majority of the funds were misappropriated to pay for Weber’s lavish lifestyle. The Commission received cooperation from the Arizona Corporation Commission, Securities Division, and the Office of the Arizona Attorney General in connection with this matter. CFTC v. Weber, No. 2:10-cv-00534-MEA (D. Az. filed Mar. 9, 2010).
  
  
• CFTC v. Rakotonanahary, et al.
  
  On March 15, 2010, the Commission filed a civil injunctive action charging Patrick Rakotonanahary and Cyber Market Group LLC (Cyber Market) with operating a multi-million dollar forex Ponzi scheme. Specifically, the complaint alleges that, since at least June 2008, Rakotonanahary, the president and Chief Executive Officer of Cyber Market, and Cyber Market induced customers to purportedly loan them money to trade forex on their behalf. The complaint alleges that the defendants promised customers weekly payments of four percent to 10 percent from the forex trading, knowing that they lacked the funds to make such payments. The complaint further alleges that the defendants falsely represented to customers that the payments were derived from profitable forex trading. In reality, however, these payments were made from customers’ own funds and/or the funds deposited by other clients. According to the complaint, the defendants also misappropriated client funds for their own personal use. The Commission received cooperation from the United States Attorney’s Office for the District of Hawaii, the Federal Bureau of Investigation and the State of Hawaii, Department of Commerce and Consumer Affairs, Office of the Securities Commissioner in connection with this matter. CFTC v. Rakotonanahary, et al., No. CV10 00144 KSC (D. Haw. Mar. 15, 2010).
  
  
• CFTC v. Highlands Capital Mgmt, LP, et al.
  
  On June 17, 2010, the Commission filed a civil injunctive action charging Highlands Capital Management, LP and its principal, Glenn Kane Jackson, with operating a fraudulent $4.3 million off-exchange forex scheme. Specifically, the Commission complaint alleges that, beginning in January 2006 and continuing through December 2009, the defendants misappropriated customer funds, issued false account statements to customers, misrepresented Jackson’s success and background as a forex trader and misrepresented the reasons why defendants could not honor customer withdrawal requests. Of the approximately $4.3 million provided to Jackson by customers, approximately $1.6 million was traded and lost, about $600,000 was refunded to customers, and the remaining $2.1 million remains unaccounted for. The complaint alleges that Jackson claimed never to have experienced a single losing year trading forex. Actual domestic forex trading accounts managed and controlled by Jackson, however, had consistent net losses each year from 2005 to 2009. Beginning as early as August 2008 and continuing through December 2009, the defendants allegedly sent customers account statements indicating that the defendants’ forex trading was consistently generating profits. Actually, however, forex trading during this period conducted by the defendants on behalf of the customers resulted in net losses. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. The CFTC received the cooperation of the Tiburon Police Department and the Marin County District Attorney in connection with this matter. CFTC v. Highlands Capital Mgmt, LP, et al., CV 10 2654 (N.D. Ca. filed June 17, 2010).
  
  
• CFTC v. FX Professional Int’l Solutions, Inc., et al.
  
  On July 13, 2010, the Commission filed a civil injunctive action charging FX Professional International Solutions, Inc. (FXP) and its principals, Pedro de Sousa (a/k/a. Pedroiz J. Sanz) and Guillermo Rosario (a/k/a. Guillermo Rosario-Colon), with issuing false account statements to customers in connection with an off-exchange forex fraud. The complaint alleges that in April 2005, Rosario and de Sousa solicited at least $535,000 from four individuals to trade forex contracts through FXP. The complaint charges that Rosario and de Sousa falsely represented to customers that since 2002, FXP had annual forex trading profits of 21 percent to 85 percent with no losing years; however, FXP did not exist prior to 2004. Furthermore, according to the complaint, defendants sent customers false monthly account statements showing profits every month from 2005 through 2008 when, in fact, the defendants’ forex trading resulted in monthly losses in 31 of 40 months during this period. The Commission received cooperation from the Federal Bureau of Investigation and the U.S. Attorneys’ Office in connection with this matter. CFTC v. FX Professional Int’l Solutions, Inc., et al., No. 1:10-cv-22311-PCH (S.D. Fla. filed July 13, 2010).
  
  
• CFTC v. Robert Mihailovich, Sr., et al.
  
  On July 27, 2010, the Commission filed a civil injunctive action charging Robert Mihailovich, Sr., and Growth Capital Management, LLC, (GCM) with fraudulent solicitation in connection with the trading of commodity futures contracts and leveraged forex. Mihailovich, Sr., is a felon who was on supervised release while he was soliciting for and operating GCM. The CFTC’s complaint, filed in the U.S. District Court for the Northern District of Texas, also charged that GCM, a registered commodity trading adviser and a commodity pool operator, and Robert Mihailovich, Jr., the listed principal and registered associated person of GCM, made false statements in required regulatory filings with the CFTC by failing to disclose that his father, Mihailovich, Sr., was a controlling principal of GCM. The CFTC’s complaint alleged that, since at least June 2008, GCM and Mihailovich, Sr., fraudulently solicited and accepted more than $30 million from approximately 93 customers to invest in futures and forex through discretionary accounts traded by GCM. To induce new investors, Mihailovich, Sr., made false representations claiming to be a successful commodity futures trader and touting GCM as having a profitable trading record. According to the complaint, Mihailovich, Sr., stated that he never experienced a losing trade. However, actual trading accounts managed and controlled by Mihailovich, Sr., realized net losses. Mihailovich, Sr., also failed to disclose to customers that he had a federal felony conviction for mail fraud, was ordered to pay approximately $197,000 in restitution, served 27 months in prison and was on a three-year supervised release. The CFTC received the cooperation of the Securities and Exchange Commission’s Fort Worth Regional Office and the National Futures Association in connection with this matter. CFTC v. Robert Mihailovich, Sr., et al. No. 3:10-cv-01473-B (N.D. Tex. filed July 27, 2010).
  
  
• CFTC v. Yancy, et al.
  
  On August 18, 2010, the Commission filed a civil injunctive action charging Jeremiah C. Yancy and his company, Longbranch Group International LLC with operating a forex Ponzi scheme that solicited at least 64 persons, including members of the church in which Yancy served as pastor. Specifically, the complaint alleges that the defendants solicited more than $1 million from at least 36 of the customers to invest in off-exchange forex contracts and misappropriated at least $462,000 of customers’ funds. As alleged, defendants told prospective customers that they managed forex trading for non-profit organizations, including churches and orphanages. Defendants allegedly promised customers monthly returns of 20 to 40 percent from forex trading and told some customers that their principal would be guaranteed. Instead, the majority of customer accounts managed by the defendants lost money, according to the complaint. On the same day the complaint was filed, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the State of Idaho Department of Finance in connection with this matter. CFTC v. Yancy, et al., No. H 10-2955 (S.D. Tex. filed Aug. 18, 2010).
  
  
• CFTC v. People’s Alternative, Inc., et al.
  
  On September 21, 2010, the Commission filed a civil injunctive action charging People’s Alternative, Inc. and its principals, Jaime Gallardo and Karl Ochoa and Maria Iracheta, with commodity pool fraud involving fraudulently solicitation of at least $1.2 million from approximately 98 commodity participants. Specifically, the complaint alleges that, since at least November 2008, defendants fraudulently solicited participants to invest in commodity futures, forex, gold and securities. However, the defendants allegedly failed to disclose to participants that their funds would be used to trade commodity futures and forex and failed to disclose the significant risks associated with such trading. Defendants also misrepresented that participants would not lose their principal, while failing to disclose the full extent of their trading losses, according to the complaint. The complaint also alleges that Gallardo, Ochoa and Iracheta together misappropriated at least $533,000 of participant funds for personal uses, such as for automobile expenses, mortgage payments and debit card purchases for entertainment, travel and food. On September 22, 2010, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the U.S. Attorney’s Office for the Central District of California in connection with this matter. CFTC v. People’s Alternative, Inc., et al., No. CV10 7013 GAF (Ex) (C.D. Cal. filed Sept. 21, 2010).
  
  
• CFTC v. Integra Capital Mgmt. LLC, et al.
  
  On September 28, 2010, the Commission filed a civil injunctive action charging Rodney W. Whitney, Nicholas T. Cox and Integra Capital Management LLP (Integra Capital) with fraud and misappropriation in connection with operating a commodity pool Ponzi scheme involving both commodity futures and off-exchange forex transactions. Specifically, the complaint alleges that, from at least September 2006 to August 2009, defendants fraudulently solicited and accepted at least $3 million from at least 16 customers to invest in a commodity pool and solicited at least five customers to trade off-exchange forex contracts. Whitney and Cox falsely represented to these customers that Integra Capital consistently earned 3 percent to 5 percent monthly returns and sustained virtually no losses in its futures and forex trading, according to the complaint. Whitney also allegedly distributed false account statements and false 1099 tax forms to Integra Capital’s customers, showing that their investments were profitable. Instead, the defendants’ trading accounts consistently lost money, according to the complaint. Furthermore, the complaint charges that Whitney and Cox misappropriated customer funds to pay personal expenses, including dining, entertainment, travel and real estate purchases. On September 29, 2010, the court entered a statutory restraining order freezing assets and preserving books and records. The Commission received cooperation from the U.S. Attorney’s Office for the Middle District of North Carolina, the U.S. Department of Justice and the U.S. Postal Inspection Service in connection with this matter. CFTC v. Integra Capital Mgmt. LLC, et al., No. 10-737 (M.D.N.C. filed Sept. 28, 2010).
  
  
• CFTC v. Total Call Group, Inc., et al.
  
  On September 29, 2010, the Commission filed a civil injunctive action charging Total Call Group, Inc. and its principals, Craig B. Poe and Thomas Patrick Thurmond, with off-exchange forex fraud. Specifically, the complaint alleges that, beginning in at least early 2006 and continuing until October 2008, the defendants fraudulently solicited approximately $808,000 from at least four customers for the purpose of trading off-exchange forex contracts. In soliciting the funds, Thurmond allegedly made false representations to one or more of Total Call Group’s customers, including that Poe had been trading forex and living off the income for more than four years and that he and Poe had personally provided more than $1 million to Total Call Group for the purpose of trading forex. Defendants did not report to customers that, at the end of August 2008, sustained trading losses and incurred FCM fees totaling approximately 90 percent of the balance in the forex trading accounts. The complaint further alleges that, from September through December 2008, Poe willfully made and sent false reports and statements to customers that overstated profits and/or failed to disclose trading losses and falsely reported customers’ account balances. CFTC v. Total Call Group, Inc., et al., No. 4:10-cv-00513 (E.D. Tex. filed Sept. 29, 2010).

• In re One World Capital Group, LLC
  
  On March 4, 2010, the Commission simultaneously filed and settled a statutory disqualification action against One World Capital Group, LLC (One World) revoking its registrations as an FCM and CTA. The statutory disqualification action was based upon a consent order of permanent injunction entered against One World and its managing member, president and AP, in a Commission enforcement action charging them with inability to demonstrate compliance with capitalization requirements and with failure to maintain required books and records. CFTC v. One World Capital Group, LLC, et al., No. 07CV 7002 (N.D. Ill. filed Feb. 25, 2010) (finding defendants violated the Act, as charged, and imposing a permanent injunction and civil monetary penalties in the amount of $260,000 against each of them). The Commission received cooperation from the National Futures Association, United States Attorney’s Office for the Northern District of Illinois and the British Columbia Securities Commission in connection with this matter. In re One World Capital Group, LLC, CFTC Docket No. SD 10-01 (CFTC filed Mar. 4, 2010).
  
  
• In re Cornerstone Capital Mgmt., Inc.
  
  On September 30, 2010, the Commission simultaneously filed and settled a statutory disqualification action against Cornerstone Capital Management, Inc. (Cornerstone) revoking its registrations as a CTA and CPO. The CFTC action is based on findings of the Securities and Exchange Commission that Cornerstone willfully violated anti-fraud provisions of the Investment Advisors Act of 1940. In re Cornerstone Capital Mgmt., Inc., CFTC Docket No. SD 10-02 (CFTC filed Sept. 30, 2010).

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