For Release: November 16, 2006
U.S. Commodity Futures Trading Commission Obtains Preliminary Injunctions Against Nevada Corporation and Two Individuals
Alliance Development Company, William Snyder, and Christi Wilson Charged with Misappropriation and Fraud in the Solicitation of Commodity Pool Participants
Washington, D.C.— The U.S. Commodity Futures Trading Commission (CFTC) announced today that on November 3, 2006, the Honorable Larry R. Hicks of the United States District Court for the District of Nevada issued consent orders of preliminary injunction against Alliance Development Company (Alliance), an unregistered commodity pool operator in Reno, Nevada; Alliance principal and unregistered commodity pool operator William Snyder of Michigan, and former Alliance principal Christi Wilson of Reno, Nevada.
The consent orders of preliminary injunction, which, among other things, prohibit Alliance, Snyder, and Wilson from engaging in any commodity futures or options trading, stem from a CFTC complaint filed on September 28, 2006. The complaint alleges that, since at least October 2004, the defendants have engaged in a number of fraudulent schemes using various fictitious entities and aliases to solicit members of the general public to invest in commodity pools operated by Alliance and Snyder that purportedly trade, among other things, commodity futures contracts.
Specifically, the CFTC complaint alleges that defendants solicited prospective pool participants and pool participants by: 1) guaranteeing monthly profits of between 20 percent and 45 percent; 2) misrepresenting that pool participant funds would be pooled to trade futures; 3) failing to disclose the significant risks involved in trading futures; and 4) providing pool participants with phony futures account statements reflecting exorbitant trading returns.
As charged, instead of depositing commodity pool money into trading accounts in the names of the pools, defendants used pool participant funds to pay for personal expenses, including Botox cosmetic injections, vehicles, expensive jewelry, and vacations. According to the complaint, defendants solicited and misappropriated at least $355,000 from pool participants.
The CFTC complaint also alleges that defendants committed or are otherwise liable for other regulatory violations, including failing to register with the CFTC as a commodity pool operator or an associated person of a commodity pool operator, commingling pool property with the property of other persons, and failing to deliver proper pool disclosure documents to pool participants.
Federal Court Freezes Assets and Bars Destruction of Books and Records
On October 3, 2006, U.S. District Court Judge Larry R. Hicks entered an ex parte statutory restraining order against defendants, freezing their assets and preventing the destruction or alteration of their books and records. The court's consent orders of preliminary injunction continue the asset freeze previously entered against all defendants.
In its continuing litigation against defendants, the CFTC is seeking permanent injunctive relief, the return of funds to defrauded customers, repayment of ill-gotten gains, and awards of civil monetary penalties.
The following CFTC Division of Enforcement staff members are responsible for this case: Rachel A. Hayes, Jo Mettenburg, Lacey Dingman, Charles D. Marvine, and Richard Glaser.
Last Updated: July 25, 2007