The U.S. Commodity Futures Trading Commission (CFTC) in Washington, D.C., on June 30 announced the filing of charges against two air traffic controllers, Louis J. Giddens, Jr. of Fayetteville, Ga., and Anthony W. Dutton of Peachtree City, Ga., as well as commodity trader Michael Gomez of Valrico, Fla., for operating a fraudulent off-exchange foreign currency (forex) scheme in which they solicited and accepted approximately $1.4 million from the general public.
The complaint was filed under seal on June 23, 2011, and on June 24, 2011, Judge William S. Duffey, Jr., of the U.S. District Court of the Northern District of Georgia, entered a restraining order freezing Gomez’s assets and prohibiting the destruction of books and records.
The CFTC complaint charges that, from at least January to October 2010, Giddens and Dutton operated commodity pools Currency Management Group, LLC and Pinnacle Capital Partners, LLC, respectively, and fraudulently solicited and accepted funds to trade forex primarily from individuals throughout Georgia and Florida.
Giddens and Dutton then allegedly transferred some, but not all, of the solicited funds to another entity they owned and operated called Pinnacle Trade Group, LLC (Pinnacle Trade) for the purpose of trading forex.
Once transferred to Pinnacle Trade, the funds allegedly were sent either directly to a forex trading account or to a bank account in the name of Elyon, LLC, a company owned and operated by Gomez, so that Gomez could trade the investors’ funds.
However, allegedly only a portion of customer money was traded in forex, with the remaining funds misappropriated by Gomez and Dutton.
The complaint further alleges that Giddens and Dutton induced investment in their respective pools by misrepresenting to pool participants in direct face-to-face meetings, in telephone conversations, and through written promissory notes that they would provide a guaranteed monthly return of either 5 or 10 percent on investments from trading forex.
Giddens and Dutton also allegedly prepared false online account statements for the pool participants showing the profitability of their investments when, in fact, the investments were not profitable.
In the continuing litigation against the defendants, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, a civil monetary penalty, permanent trading and registration bans and a permanent injunction against further violations of the federal commodities law.
The CFTC Division of Enforcement said in a news release it appreciates the substantial assistance of the U.S. Attorney’s Office (Civil Division), Northern District of Georgia. The CFTC further acknowledges the assistance of the Swiss Financial Market Supervisory Authority.