Release Number 8481-22
Federal Court Orders Kentucky Resident to Pay $17 Million for Defrauding Commodity Futures Clients
January 19, 2022
Washington, DC – The Commodity Futures Trading Commission today announced that the U.S. District Court for the Eastern District of Kentucky entered a consent order for permanent injunction, restitution, and disgorgement against William S. Evans III (d/b/a Turning Point Investments) of Harrodsburg, Kentucky, and Evans’ wife, Frances Evans. The court imposed almost $17 million in relief for defendant’s wrongdoing, including his misappropriation of client money intended for futures trading.
The order requires that Evans pay restitution of $16,934,773.40, and Evans and his wife to disgorge $10,040,418.44. The order also imposes permanent trading and registration bans. The judgment resolves a CFTC enforcement case filed on May 28, 2020. [See CFTC Press Release No. 8170-20].
According to the order, since approximately September 2018, Evans solicited and accepted at least $10.6 million from participants with numerous misrepresentations, including that he would use their funds to trade commodity futures, when in fact Evans misappropriated the funds for his personal use and to pay participants in a Ponzi-like scheme. He also misrepresented his fee structure and the likelihood of profits and risks. The order also states that Evans acted in a capacity requiring him to register with the CFTC as a Commodity Pool Operator, but Evans was not registered, as required.
The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure that wrongdoers are held accountable.
The CFTC appreciates the cooperation and assistance of the U. S. Attorney’s Office for the Eastern District of Kentucky.
The following CFTC Division of Enforcement staff members responsible for this case are Candy Haan, Heather Dasso, Venice Bickham, David Terrell, Scott R. Williamson, and Robert T. Howell.
CFTC Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories and Articles, including the Commodity Pool Fraud Advisory, which provides information about a type of fraud involving individuals and firms, often unregistered, offering investments in commodity pools.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.