The CFTC has announced new charges which have been made against six entities from Florida. These entities consist of three individuals as well as three associated companies. The individuals involved in the scheme were; Robert Johnson, Ross Baldwin and Kathleen Hook, who are all subject to litigation as well as the affiliate companies PIC, NCBWC and NCB.
The complaint relates to activities that were undertaken over a five year period between 2014 and 2019. The fraudulent activities carried out by the defendants involved the leasing of precious metals. The scheme involved promising investors a monthly rate of return, claimed to be a dividend, based on silver that the investors owned. All investors were informed that their investments were both stored safely and had the requisite insurance in place.
In reality, there was no storage facility, no insurance in place and any funds that investors gave to the scheme were used to pay out the dividend to investors. The complaint further alleges that the individuals involved gained approximately $8 million in funds and silver from around 60 investors due to the hoax silver leasing program.
The Acting Director of Enforcement, Vincent McGonagle commented:
As today’s enforcement action shows, the CFTC will vigorously investigate and seek to hold accountable those who make false promises and misappropriate customer funds.
The CTFC is seeking a number of charges to be filed against all six defendants. This includes restitution paid to victims, the return of any funds gained from the scheme, fines and a permanent ban from being involved in trading. The CTFC is issuing the charges in Florida, where all the offences took place.
As well as the civil charges, there are also criminal charges being brought. The US Attorney for the Southern District of New York has also made it clear that the three individuals who carried out the scheme will face criminal charges.
There have been several offices that have assisted the CTFC in the process of bringing about the charges. This includes the US Attorney’s office, the FBI, the FCA in the UK and the US Mint. There’s no information regarding how harsh the final penalties will be at this moment in time. However, as the story progresses, more information will be released.
Civil enforcement action was recently filed against ZTegrity Inc. and its CEO Troy Mason. The complaint charged the accused with fraudulent solicitation and the failure to register with the CFTC, as legally required by the CEA.
Last month, the CFTC announced charges made against commodity pool operators LJM Partners Ltd and LJM Funds Management Ltd, making its Chief Portfolio Manager, Anish Parvataneni alongside its Chairman Anthony J. Caine accountable.
