April 6, 2011
CFTC Charges Pennsylvania-based New Century Investment Management LLC and Ward Onsa of Marco Island, Florida, with Operating a Commodity Pool Ponzi Scheme
Defendants allegedly defrauded pool participants of at least $2.2 million and misappropriated participants’ funds to pay personal debts and living expenses.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it filed a complaint charging New Century Investment Management LLC (New Century) of Southampton, Pa., and its principal, Ward Onsa of Marco Island, Fla., with solicitation fraud, misappropriation and issuing false account statements to commodity pool participants.
The CFTC complaint, filed on April 5, 2011, in the U.S. District Court for the Eastern District of Pennsylvania, alleges that New Century and Onsa defrauded at least 12 pool participants of at least $2.2 million from March 2005 to September 2010, while acting respectively as a Commodity Pool Operator (CPO) and an Associated Person of a CPO.
The defendants allegedly represented to pool participants that New Century operated a hedge fund called the New Century Hedge Fund Partners, I, LP, which traded futures and options on futures contracts, including e-mini S&P futures contracts and options on S&P 500 and e-mini S&P 500 futures contracts. However, the defendants allegedly failed to disclose to pool participants that the hedge fund suffered significant trading losses. To conceal those losses, defendants provided pool participants with false account statements reflecting fictitious increases in the value of their accounts.
The CFTC complaint further alleges that the defendants misappropriated participants’ funds by using the money to pay Onsa’s personal debts and living expenses. Onsa allegedly received approximately $131,000 of participants’ funds, which he used for his own purposes. He also allegedly used $5,177.39 of the participants’ funds to pay taxes on his Marco Island residence and used participants’ funds to make more than $38,000 in debit card purchases and ATM withdrawals for his personal benefit. The complaint also charges Onsa with misappropriating customer funds by using the funds of more recent pool participants to pay certain older pool participants, as is typical of a Ponzi scheme.
In its continuing litigation, the CFTC seeks restitution to defrauded customers, a return of ill-gotten gains, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of the federal commodities laws.
The CFTC thanks the National Futures Association for its assistance.
The CFTC Division of Enforcement staff members responsible for this case are Elizabeth C. Brennan, Philip Rix, Steven Ringer, Lenel Hickson and Stephen J. Obie.
Last Updated: April 6, 2011