Important: Please note that the company which is the subject of investigation by the CFTC is “Yellowstone Partners, Inc.” of North Carolina, and is entirely unrelated to Yellowstone Partners, LLC, a Registered Investment Advisory firm based in Idaho Falls, ID. I guess these scammers not only stole clients’ funds but also tried to conceal their identity by using a name similar to another unrelated and legit firm.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it charged Dennis Todd Hagemann and Yellowstone Partners, Inc., both of Raleigh, N.C., with operating a Ponzi scheme involving the fraudulent solicitation of at least $700,000 from at least nine individuals to trade foreign currency futures (forex) managed accounts and/or a pooled investment. Defendants also allegedly attempted to solicit funds from at least one other individual.
On March 10, 2010, Chief Judge Louise Flanagan of the U.S. District Court for the Eastern District of North Carolina entered an emergency order freezing the defendants’ assets and prohibiting the destruction of books and records. The order also requires the defendants to account for assets.
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The CFTC’s enforcement action, filed under seal on March 9, 2010, charges that, from at least September 2009 to the present, the defendants fraudulently solicited and received at least $700,000 from retail forex customers. In at least two instances, Hagemann solicited $50,000 through meetings held at restaurants, according to the complaint.
The complaint charges that Hagemann falsely claimed experience and success in trading forex and lured customers with false promises of quick and large profits, including that Yellowstone Partners was returning 100 to 300 percent to customers “every couple of months.” He also created the impression of being a well established forex trader by falsely representing that 1) he had $500 million of investments under his control at all times, 2) his forex trading system made money even when markets dropped and 3) his Russian contacts could help his investments, according to the complaint. Hagemann also claimed to be registered with the National Futures Association (NFA) and to have employees registered with the NFA when, in fact, he is not registered with the NFA and does not have any employees registered with the NFA in any capacity.
The rest here.