For Release: October 5, 2006
U.S. Commodity Futures Trading Commission Charges Utah Resident William D. Perkins with $3.4 Million Hedge Fund Fraud
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a civil enforcement action in the United States District Court for the District of New Jersey, Camden Vicinage, against William D. Perkins of St. George, Utah, alleging that Perkins fraudulently solicited participation interests in a commodity pool he operated under the name Universe Capital Appreciation, LLC (Universe), which led to the loss of over $2 million of the $3.4 million that participants invested, in violation of federal commodity laws.
The CFTC is seeking permanent injunctive relief, disgorgement of all benefits received from the fraudulent scheme, restitution, and civil monetary penalties.
The CFTC complaint, filed on September 28, 2006, alleges that, from at least January 2002 through March 2004, Perkins touted Universe as a way for investors with less than $100,000 to participate in a so-called “superfund.” Perkins claimed that the superfund was enjoying extraordinary success trading in selected financial futures contracts.
Specifically, the complaint alleges that Perkins referred Universe participants to solicitation materials and a website, which claimed that “astonishing” profits of approximately 100% per annum were being made by the superfund. In order to assure Universe participants that the reported profits were accurate and reliable, Perkins represented that those profits were “verified” by an allegedly independent CPA, whose name was not disclosed. In fact, as the complaint alleges, the superfund accepted approximately $43 million during the relevant time and used only a portion to trade commodity futures contracts but lost, misappropriated, or dissipated approximately $13.6 million.
Those facts are the basis of a pending federal injunctive action that the CFTC filed in 2004 entitled CFTC v. Equity Financial Group, LLC, et al., Civil Action # 04-cv-1512 (D.N.J.) (see CFTC Release 4908-04 April 6, 2004) and a related federal criminal action against one of the defendants in that case, United States v. Coyt E. Murray, No. 3:06cr79-1 (W.D.N.C.).
Among other allegations in the CFTC complaint are that Perkins misrepresented the compensation he expected to receive from operating Universe and that he prepared and distributed false statements to Universe investors. The complaint also adds Tax Accounting Office (TAO), Perkins’ private bookkeeping service, as a relief defendant, on the ground that TAO performed no services for Universe, but received funds from Universe to which it was not entitled.
As part of Perkins’ alleged solicitation fraud, the CFTC complaint further states that Perkins failed to disclose that, immediately prior to forming Universe, he had participated in at least three other failed high-yield investment schemes in which Perkins and the business acquaintance and partner who brought the Universe opportunity to Perkins had solicited and lost over $2 million of participant funds in other apparent investment scams.
The following Division of Enforcement staff are responsible for this case: Elizabeth M. Streit, Rocell Cyrus, Joy McCormick, Rosemary Hollinger, Scott Williamson, and Venice Bickham.
Last Updated: April 22, 2010