July 28, 2011
Federal Court in California Orders Ruben Gonzalez, Jose Naranjo, and their Company to Pay over $8 Million for Operating Ponzi Scheme and Misappropriation
Gonzalez sentenced to more than 11 years imprisonment in a criminal proceeding for the same fraudulent scheme.
Washington, DC— The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Otis D. Wright II of the U.S. District Court for the Central District of California, Western Division, entered orders for default judgment and permanent injunction against defendants New Golden Investment Group, LLC (NGI) of West Covina, Calif., and its principals, Ruben Gonzalez also of West Covina, and Jose Naranjo, formerly of La Mirada, Calif.
The judgments arise from a CFTC complaint filed in the U.S. District Court for the Central District of California, Western Division, on May 20, 2010, charging NGI, Gonzalez, and Naranjo with fraud and misappropriation in connection with a multi-million dollar Ponzi scheme (see CFTC Press Release 5828-10, May 2011). The CFTC’s complaint charged that the defendants fraudulently solicited and accepted approximately $3.65 million from at least 165 members of the Los Angeles-area Spanish speaking community for various investments, including commodity futures trading. Gonzalez and Naranjo were also charged with misappropriating hundreds of thousands of dollars of investor funds for their personal use.
The judgments against Gonzales, NGI, and Naranjo, entered on July 20, 2011, July 19, 2011, and February 15, 2011, respectively, impose permanent trading and registration bans on them. The orders require NGI and Naranjo each to pay $2,220,771.49 in restitution, NGI and Naranjo to pay disgorgement of $558,000 and 267,000, respectively, and civil monetary penalties of $1,674,000 and $801,000, respectively. Naranjo, a Mexican National, is believed to have fled the United States.
The judge ordered Gonzales to disgorge $249,000 and pay a $748,500 civil monetary penalty. Gonzalez was sentenced in December 2010 to more than 11 years imprisonment, after pleading guilty to fraud charges in a related criminal proceeding filed on the same day as the CFTC action (see United States v. Ruben Juan-Gonzalez, No. CR-10-0509-PA [C.D.Cal. filed May 20, 2010]). The criminal court ordered Gonzales to pay $2,220,771.49 in restitution to defrauded NGI pool participants for the same misconduct charged in the CFTC’s civil complaint.
The court’s judgments find that NGI, Gonzalez, and Naranjo solicited the Spanish speaking public in and around West Covina, Calif., to trade commodity futures and retail off-exchange foreign currency and falsely claimed that they would double their money within a year. In reality, NGI, Gonzalez, and Naranjo misappropriated over $1 million of customer funds to purchase a Mercedes-Benz, airline tickets, and to make house payments. The orders also find that NGI, Gonzalez, and Naranjo ran a Ponzi scheme using new investor money to pay phony profits to some existing investors.
The CFTC appreciates the assistance of the United States Attorney’s Office for the Central District of California and the Federal Bureau of Investigation.
CFTC Division of Enforcement staff responsible for this case are Susan Gradman, Brigitte Weyls, Camille M. Arnold, Judith McCorkle, Eleanor Oh, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
Last Updated: July 28, 2011