The duo of Robert Leland Johnson and Marisa Elena have been sued by the U.S. Commodity Futures Trading Commission (CFTC) for fraud in the sort of a Ponzi scheme.
The CFTC said it has filed a civil enforcement action in the U.S. District Court for the Central District of California, Eastern Division, against Capitol Equity FX LLC (Capitol Equity).
According to the statement issued by CFTC, Robert Leland Johnson, Marisa Elena both ran the Ponzi scheme as a purported hedge fund with main operations in California.
According to the the CFTC Complaint, filed on April 19, 2017, charges Defendants with commodity futures fraud; off-exchange, leveraged or margined retail foreign currency (forex) fraud; commodity pool fraud; and failure to register with the CFTC, as required. The Complaint also charges Capitol Equity with engaging in activities prohibited for a commodity pool operator, including commingling customer funds with Defendants’ personal funds.
According to the Complaint, from at least May 2012 through May 2015, Defendants fraudulently solicited at least $1,735,750 from members of the public to participate in a pooled fund that traded commodity futures and forex contracts. As alleged, the Defendants knowingly made material misrepresentations and omissions concerning their trading abilities, strategies, and profits for the purpose of enticing pool participants to transfer funds to Defendants.
Defendants allegedly also created and provided pool participants with fabricated performance statements and account documents designed to mislead pool participants. The Complaint further charges that these fraudulent documents falsely reflected significant trading profits, concealed losses, and overstated account balances by millions of dollars.
Misappropriation of Pool Participants’ Funds
The Complaint alleges that the Johnsons misappropriated all of pool participants’ funds by paying their own personal expenses, by depositing pool participants’ funds into their personal bank accounts, and by trading pool participants’ funds in their personal trading accounts. As alleged, Defendants also diverted a portion of pool participants’ funds to earlier-in-time customers in the manner of a “Ponzi” scheme.
The Commission said it seeks full restitution to defrauded pool participants, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws, as charged.