For Release: September 18, 2008
Pennsylvania Resident Gary Scholze Ordered to Pay $1 Million Civil Monetary Penalty in Commodity Futures and Options Anti-Fraud Case
Federal Court Finds that Scholze Misappropriated Customer Funds
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained a $1 million civil monetary penalty judgment against Pennsylvania resident Gary F. Scholze to settle a CFTC anti-fraud enforcement action. The order also permanently prohibits Scholze from trading, soliciting funds, and seeking registration with the CFTC or otherwise engaging in any commodity interest-related activity.
The court’s order, entered by the U.S. District Court for the District of Vermont, arises from a CFTC enforcement action filed on June 8, 2006 (see CFTC Press Release 5188-06, June 20, 2006). The order finds that, beginning in August 2001, Scholze fraudulently solicited approximately $2.1 million from about 30 individuals to trade commodity futures and options. The order further finds that Scholze sustained trading losses and misappropriated approximately $1.5 million in customer funds for his personal expenses. According to the order, Scholze issued false account statements reflecting purported profitable trading to conceal his misappropriation and trading losses.
In assessing the $1 million civil monetary penalty, the court noted the number of serious violations, the level of planning by Scholze, the harm to victims and the system, and the need for general deterrence. The court’s order recognized that Scholze has been ordered to pay restitution of approximately $2.1 million in a related criminal action. In that action before the same court, Scholze pled guilty to multiple fraud counts and is currently incarcerated in a federal correctional institution serving a 63-month sentence.
The CFTC wishes to thank the United States Attorney’s Office for the District of Vermont and the Federal Bureau of Investigation for their assistance in this matter.
The following CFTC Division of Enforcement staff members are responsible for this case: James H. Holl, III, Katherine M. Scovin, Kara Mucha, Gretchen Lowe, and Vincent McGonagle.
Last Updated: September 18, 2008