March 31, 2014
Federal Court Orders Ward Onsa of Marco Island, Florida and His Company, New Century Investment Management LLC of Southampton, Pennsylvania to Pay $5.7 Million Civil Monetary Penalty for Operating a Commodity Pool Ponzi Scheme
Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) today announced that on March 20, 2014, Judge Mary A. McLaughlin of the U.S. District Court for the Eastern District of Pennsylvania entered a final judgment Order imposing a civil monetary penalty of almost $6 million against Defendants Ward Onsa of Marco Island, Florida, and his company, New Century Investment Management LLC (New Century), of Southampton, Pennsylvania, in a CFTC enforcement action. The court’s March 20, 2014, Order followed an earlier default judgment Order entered on December 5, 2011, finding that the Defendants had committed fraud and imposing registration and trading bans.
The Orders stem from a CFTC Complaint filed on April 5, 2011, in which the CFTC charged Onsa and New Century with solicitation fraud, misappropriation, and issuing false account statements to commodity pool participants while operating a commodity pool Ponzi scheme (see CFTC Release 6016-11, April 6, 2011).
The court’s partial default judgment Order finds that through Onsa’s fraudulent misrepresentations at least 12 pool participants invested a total of more than $2.2 million with New Century Hedge Fund Partners I, LP to trade commodity futures and options contracts. The Order further finds that the Defendants misappropriated pool participants’ funds and used them to pay personal expenses and to pay earlier participants with newer participants’ funds in the manner of a Ponzi scheme. The Order imposes permanent trading and registration bans on Onsa and New Century, and prohibits them from violating the anti-fraud provisions of the Commodity Exchange Act, as charged.
The court’s final judgment Order concludes that based on the deterrent purposes of a civil monetary penalty (CMP), the egregiousness of the Defendants’ intentional conduct, the length of time of the Defendants’ wrongful trading activity, and the Defendants’ failure to attempt to ameliorate their wrongful conduct, the CFTC’s request for a CMP of triple Defendants’ gain is appropriate and orders Onsa and New Century to jointly pay a CMP of $5.7 million, in addition to post-judgment interest.
The Order provides that all payments made by Onsa pursuant to the Order will be applied first to satisfy Onsa’s criminal restitution obligation in U.S. v. Ward Onsa, Docket No. 10-CR-730 (DLI) (U.S. District Court for the Eastern District of New York) and, upon satisfaction of that obligation, thereafter will be applied to Defendants’ CMP obligation. In that criminal case, on July 26, 2012, Onsa was sentenced to 78 months imprisonment and on August 21, 2012, was ordered to pay restitution of $3,135,132.22 to 26 victims of various criminal schemes perpetrated by him, including the scheme involving the defrauding of New Century pool participants. Onsa is currently incarcerated at the Federal Correctional Institution located in Estill, South Carolina.
The CFTC appreciates the assistance of the Office of the United States Attorney for the Eastern District of New York.
CFTC Division of Enforcement staff members responsible for this case are Elizabeth Brennan, Philip Rix, Steven Ringer, Lenel Hickson, Jr., and Manal M. Sultan.
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CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
Last Updated: March 31, 2014