December 27, 2010
California Federal Court Orders Paul Abad and His Companies to Pay More than $860,000 in Restitution and a Civil Monetary Penalty to Settle Commodity Pool Fraud Action
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained more than $860,000 in restitution and civil monetary penalties in a federal judgment against defendants Paul Abad of Orange County Calif., and his companies, Thirteen Thirty-Two, Inc. and Thirteen Thirty-Two, Inc. dba MRTS Asset Management.
The consent order, entered by the Honorable Andrew J. Guilford of the U.S. District Court for the Central District of California, requires the defendants jointly and severally to pay $485,845 in restitution and a joint and several $375,000 civil monetary penalty. The order also permanently bans the defendants from engaging in any commodity-related activity, including trading and registering with the CFTC.
The consent order stems from a CFTC complaint filed on December 1, 2008, charging the defendants with misappropriating customer funds and concealing trading losses in connection with operating a fraudulent commodity trading pool. The defendants allegedly solicited at least $400,000 from the general public to trade commodity futures contracts, sustained approximately $122,000 in trading losses, returned some funds to pool participants and misappropriated approximately $230,000 of customer funds. The defendants also were charged with routinely sending false statements to pool participants reflecting profitable trading returns (see CFTC Press Release 5578-08, December 4, 2008).
In a related criminal action, the Orange County District Attorney’s Office filed a criminal complaint against Abad in Orange County Superior Court, charging him with 25 felony counts under California law. The criminal complaint included charges involving false account statements, misappropriation and the use of a scheme to defraud. On November 3, 2010, Abad pled guilty to all counts and was sentenced to five years, four months in California state prison. The court also ordered Abad to pay criminal restitution of more than $600,000 (see The People of the State of California v. Abad, Case No. OCSO 08-032842 [C.D. Cal. filed Oct. 22, 2009]).
The CFTC acknowledges the assistance of the Orange County District Attorney’s Office, the California Corporation Commission and the Orange County Sheriff’s Department.
The following CFTC staff members are responsible for this case: Timothy M. Kirby, Kevin K. Batteh, Kara Mucha, Gretchen L. Lowe and Phyllis J. Cela.
Last Updated: December 27, 2010