Washington, D.C. – Bharat “Brad” Adatia, along with Sharief “Sharice” D. McDowell and Todd Krejcio, have been accused of large-scale commodity fraud, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on April 26, 2011, in the U.S. District Court for the Central District of California. A restraining order was immediately issued, freezing the defendants’ assets and preventing the destruction of relevant records.
The CFTC alleges that Adatia, McDowell, and the companies 20/20 Trading Company, Inc. and 20/20 Precious Metals, Inc., defrauded customers out of at least $4 million beginning in 2006. The complaint details fraudulent practices involving both commodity options trading and leveraged precious metals transactions.
Specifically, the complaint charges 20/20 Trading, Adatia, and McDowell with commodity options fraud, failing to disclose the unlikelihood of profit and the high probability of loss to customers. Adatia and 20/20 Trading are also accused of failing to properly supervise McDowell’s actions. Following the closure of 20/20 Trading in October 2009, Adatia allegedly established 20/20 Precious Metals and continued the fraudulent scheme, this time involving leveraged metals transactions.
The CFTC alleges that Adatia, McDowell, and Krejcio misrepresented the services offered by 20/20 Precious Metals, falsely claiming they would purchase physical metals, secure financing, and arrange for secure storage. In reality, the complaint states, no metals were purchased, no financing was obtained for customers, and no storage arrangements were made. Since late 2009, 20/20 Precious Metals allegedly collected over $1 million in customer deposits and over $400,000 in commissions – representing more than one-third of the deposited funds.
The complaint further alleges that approximately 63 percent of the $3.8 million lost by 20/20 Trading customers was attributed to commissions charged by the company. Notably, nearly half of these customers utilized IRA funds, resulting in losses exceeding $1.9 million. A hearing on the CFTC’s motion for a preliminary injunction is scheduled for June 6, 2011. The defendants face potential penalties including disgorgement of ill-gotten gains, civil penalties, and permanent trading bans.
Source: CFTC.gov
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