CFTC Fines Fraudulent Commodity Pool Operator for $1.4 Million
The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court order requiring defendants Oscar Hernandez of Miami, Fla., and Midway Trading Company, LLC (Midway) and Conquest Investment Group, Inc. (Conquest), both Florida companies owned and controlled by Hernandez, to pay a $1.4 million civil monetary penalty to settle CFTC charges that they operated a multi-million dollar commodity pool Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term and misappropriated customer funds for personal use.
The consent order of permanent injunction was entered on September 27, 2012, by Judge Robin S. Rosenbaum of the U.S. District Court for the Southern District of Florida. The order also imposes permanent trading and registration bans against the defendants and permanently prohibits the defendants from further violations of the Commodity Exchange Act, as charged.
Specifically, the order finds that, beginning in or about 2005 and continuing through about December 2008, the defendants fraudulently solicited over $3.8 million from pool participants by telling them that Hernandez had developed a risk-free commodity trading system that would guarantee annual returns of from 20 percent to 60 percent. Defendants misappropriated approximately $1 million of those funds to pay for personal expenses, including mortgages, luxury car Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, and American Express bills, the court’s order finds.
In a related criminal proceeding in November 2011, Hernandez pleaded guilty to conspiracy to commit securities and commodities fraud. In March 2012, Hernandez was sentenced to 57 months imprisonment and ordered to pay restitution to pool participants (U.S. v. Hernandez, 11-20686-CR-Lenard, S.D. Fla.).
The U.S. Commodity Futures Trading Commission (CFTC) today announced that it obtained a federal court order requiring defendants Oscar Hernandez of Miami, Fla., and Midway Trading Company, LLC (Midway) and Conquest Investment Group, Inc. (Conquest), both Florida companies owned and controlled by Hernandez, to pay a $1.4 million civil monetary penalty to settle CFTC charges that they operated a multi-million dollar commodity pool Ponzi Scheme Ponzi Scheme A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and Read this Term and misappropriated customer funds for personal use.
The consent order of permanent injunction was entered on September 27, 2012, by Judge Robin S. Rosenbaum of the U.S. District Court for the Southern District of Florida. The order also imposes permanent trading and registration bans against the defendants and permanently prohibits the defendants from further violations of the Commodity Exchange Act, as charged.
Specifically, the order finds that, beginning in or about 2005 and continuing through about December 2008, the defendants fraudulently solicited over $3.8 million from pool participants by telling them that Hernandez had developed a risk-free commodity trading system that would guarantee annual returns of from 20 percent to 60 percent. Defendants misappropriated approximately $1 million of those funds to pay for personal expenses, including mortgages, luxury car Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term, and American Express bills, the court’s order finds.
In a related criminal proceeding in November 2011, Hernandez pleaded guilty to conspiracy to commit securities and commodities fraud. In March 2012, Hernandez was sentenced to 57 months imprisonment and ordered to pay restitution to pool participants (U.S. v. Hernandez, 11-20686-CR-Lenard, S.D. Fla.).