For Release: May 15, 2009
CFTC Charges Las Vegas Resident Gordon Driver and His Companies in $13.5 Million Ponzi Fraud
California Federal Court Freezes Defendants’ Assets
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) announced today that on May 14, 2009, the Federal District Court in Los Angeles, California, entered an order freezing the assets of Gordon A. Driver of Las Vegas, Nevada, and his Las Vegas-based companies, Axcess Automation LLC (Axcess Automation) and Axcess Fund Management LLC (Axcess Fund Management). On the same day, the CFTC filed a complaint charging them with fraudulently soliciting commodity pool participants, misappropriating participants’ funds, and issuing false statements to participants in a $13.5 million fraud involving over 100 participants in the United States and Canada.
“Domestic and foreign regulators will continue to cooperate and combine our resources to combat the pestilence of Ponzi fraud schemes that cross borders,” said CFTC Acting Director of Enforcement Stephen J. Obie.
The CFTC complaint alleges that, from at least February 2006 through the present, the defendants defrauded pool participants, misappropriated pool participant funds and operated two commodity pools 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 Driver’s trading generated monthly profits of around 20 percent and issued false account statements to give credibility to these misrepresentations. According to the complaint, despite accepting over $13.5 million, the defendants used only about $3.7 million for trading during the relevant time period, and Driver’s trading during that time resulted in approximately $3.5 million of trading losses, or 95 percent of the funds invested. Pool participant funds were also allegedly commingled with non-pool funds.
According to the CFTC complaint, the defendants never informed the pool participants that they had traded only a portion of their funds and never informed them of the trading losses. Moreover, Driver misappropriated pool funds for his personal expenses, including cash withdrawals at Las Vegas casinos. In addition, the complaint charges Driver and Axcess Automation each with illegally acting as an unregistered commodity pool operator (CPO) and Axcess Fund Management, a registered CPO, with failing to keep and produce, upon request by the CFTC, required books and records.
The CFTC is seeking preliminary and permanent injunctive relief, restitution, disgorgement of ill-gotten gains, civil monetary penalties, and other relief.
The CFTC wishes to thank the U.S. Securities and Exchange Commission, the Ontario Securities Commission, and the U.S. Attorney’s Office for the Central District of California for their assistance in this matter.
The following CFTC Division of Enforcement staff members are responsible for this case: W. Derek Shakabpa, Judith M. Slowly, Michael R. Berlowitz, David Acevedo, Lenel Hickson, Jr., and Vincent A. McGonagle.
Last Updated: May 14, 2009