For Release: March 12, 2009
CFTC Charges Tennessee Resident and Las Vegas-based Firm with Fraud and Misappropriation in $20 Million Commodity Pool Ponzi Scheme
Federal Court Promptly Freezes Assets of Dennis R. Bolze and His Firm, Centurion Asset Management, Inc.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on March 4, 2009, the federal district court in Knoxville, Tennessee, issued a court order freezing the assets of Dennis R. Bolze of Gatlinburg, Tennessee, and his Las Vegas-based company, Centurion Asset Management, Inc. (CAM). The asset freeze order was entered a day after the CFTC filed a complaint charging them with fraudulently soliciting commodity pool participants, misappropriating participants’ funds, and issuing false statements to participants in a $20 million fraud involving at least 100 participants in the United States and Europe in a six-year-old scheme.
The CFTC complaint, filed in the United States District Court for the Eastern District of Tennessee on March 3, 2009, also names Advanced Traded Services, Inc. (ATS), another firm operated by Bolze, as a relief defendant because ATS received funds as a result of defendants’ fraudulent conduct and has no legitimate entitlement to those funds.
“Bolze engaged in an international fraud claiming victims from both the US and Europe. In today’s globalized markets fraudsters no longer respect national boundaries. This is the reason the CFTC has engaged in a concerted effort to work cooperatively with our fellow regulators worldwide,” according to CFTC Acting Director of Enforcement Stephen J. Obie.
The CFTC complaint alleges that, from at least Spring 2002 through the present, the defendants misappropriated pool participant funds for their own benefit and operated the commodity pool as a Ponzi scheme, using newly received participant funds to pay purported profits and withdrawals to other participants.
Defendants allegedly misrepresented to prospective pool participants that Bolze’s trading generated annual profits of between from 15 and 20 percent and issued false account statements to give credibility to these misrepresentations. According to the complaint, despite accepting over $20 million, the defendants’ actual commodity futures trading accounts never exceeded $250,000 in equity, and Bolze’s trading during the relevant time resulted in approximately $800,000 of trading losses.
According to the CFTC complaint, Bolze also failed to disclose to prospective pool participants that he plead guilty in 2001 to four counts of failing to file sales tax returns and failing to pay sales tax, resulting in a six-year prison sentence. The prison sentence was ultimately suspended, and Bolze was placed on supervised probation and fined.
The CFTC is seeking permanent injunctive relief, return of funds to defrauded participants, repayment of ill-gotten gains, civil penalties, and other equitable relief. The CFTC is also seeking an order requiring ATS, the relief defendant, to disgorge funds up to the amount it received as a result of defendants’ fraudulent conduct.
The CFTC wishes to thank the Securities and Exchange Commission and the Comision Nacional del Mercado de Valores for assistance in this matter.
The following CFTC Division of Enforcement staff are responsible for this case: Diane M. Romaniuk, Jon Kramer, Michael Tallarico, Mary Beth Spear, Ava M. Gould, Scott R. Williamson, Rosemary Hollinger, and Richard B. Wagner.
R. David Gary
Last Updated: March 12, 2009