Federal Court makes ponzi scheme operator jump through Hoopes of fire and pay $11.8 million
Author Paul Holmes
A long-standing CFTC case versus Michael Justin Hoopes of Rexburg, IA appears to be finally over after a nine month investigation and hearing. The CFTC initially charged Hoopes and his company Aspen Trading, LLC with solicitation fraud and misappropriation with a commodity futures scheme in late October of 2011.
The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court order requiring defendant Michael Justin Hoopes of Rexburg, Idaho, to pay more than $10.4 million in restitution and a civil monetary penalty of over $1.4 million for operating a 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 that defrauded Idaho residents and others. The order also imposes permanent trading and registration bans against Hoopes and permanently prohibits him from further violations of the Commodity Exchange Act and CFTC regulations, as charged.
The consent order of permanent injunction, entered on July 26, 2012, by Judge Edward J. Lodge of the U.S. District Court for the District of Idaho, stems from a CFTC complaint filed on October 25, 2011, that charged Hoopes with solicitation fraud and misappropriation in connection with a commodity futures scheme (see CFTC Press Release 6128-11, October 26, 2011).
The order finds that from at least September 2007 to October 25, 2011, Hoopes fraudulently solicited and accepted $2,068,103 from 10 individuals, mostly Idaho residents, to trade stock index commodity futures in a commodity pool that he owned and operated called Aspen Trading, LLC. The order also finds that Hoopes solicited and accepted an additional $9.68 million from other mostly Idaho residents during the same period for various other investments, all of which was extensively commingled with Hoopes’ personal funds and funds accepted for futures trading in Aspen Trading. Hoopes misappropriated at least $151,694 of the commingled funds for his personal expenses, including car, credit card, and mortgage 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, according to the order.
Between October 2006 and May 31, 2011, Hoopes suffered net losses of over 90 percent of the $2,280,550 he traded in futures, according to the order. To conceal his losses, Hoopes paid pool participants $594,339 in purported profits in the manner of a Ponzi scheme and issued false account statements to at least one pool participant showing that the Aspen Trading account was earning monthly profits as high as 83.52 percent, with only one losing month, according to the order. In reality, however, Hoopes never opened a trading account in Aspen Trading’s name but simply altered his personal trading account statements to make it appear as though the Aspen Trading account was earning large profits from futures trading, the order finds.
Author Paul Holmes
A long-standing CFTC case versus Michael Justin Hoopes of Rexburg, IA appears to be finally over after a nine month investigation and hearing. The CFTC initially charged Hoopes and his company Aspen Trading, LLC with solicitation fraud and misappropriation with a commodity futures scheme in late October of 2011.
The U.S. Commodity Futures Trading Commission (CFTC) obtained a federal court order requiring defendant Michael Justin Hoopes of Rexburg, Idaho, to pay more than $10.4 million in restitution and a civil monetary penalty of over $1.4 million for operating a 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 that defrauded Idaho residents and others. The order also imposes permanent trading and registration bans against Hoopes and permanently prohibits him from further violations of the Commodity Exchange Act and CFTC regulations, as charged.
The consent order of permanent injunction, entered on July 26, 2012, by Judge Edward J. Lodge of the U.S. District Court for the District of Idaho, stems from a CFTC complaint filed on October 25, 2011, that charged Hoopes with solicitation fraud and misappropriation in connection with a commodity futures scheme (see CFTC Press Release 6128-11, October 26, 2011).
The order finds that from at least September 2007 to October 25, 2011, Hoopes fraudulently solicited and accepted $2,068,103 from 10 individuals, mostly Idaho residents, to trade stock index commodity futures in a commodity pool that he owned and operated called Aspen Trading, LLC. The order also finds that Hoopes solicited and accepted an additional $9.68 million from other mostly Idaho residents during the same period for various other investments, all of which was extensively commingled with Hoopes’ personal funds and funds accepted for futures trading in Aspen Trading. Hoopes misappropriated at least $151,694 of the commingled funds for his personal expenses, including car, credit card, and mortgage 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, according to the order.
Between October 2006 and May 31, 2011, Hoopes suffered net losses of over 90 percent of the $2,280,550 he traded in futures, according to the order. To conceal his losses, Hoopes paid pool participants $594,339 in purported profits in the manner of a Ponzi scheme and issued false account statements to at least one pool participant showing that the Aspen Trading account was earning monthly profits as high as 83.52 percent, with only one losing month, according to the order. In reality, however, Hoopes never opened a trading account in Aspen Trading’s name but simply altered his personal trading account statements to make it appear as though the Aspen Trading account was earning large profits from futures trading, the order finds.