Fairfax, Virginia resident Amrit Jaswant Singh Chahal and his firm, Kane Capital Investment Group, LLC, are facing civil charges from the Commodity Futures Trading Commission (CFTC) alleging a multi-million dollar commodity fraud. The CFTC filed the action in the U.S. District Court for the Eastern District of Virginia on April 13, 2018.
The complaint accuses Chahal and Kane Capital of commodity futures fraud, commodity pool fraud, and illegally mixing company funds with Chahal’s personal accounts. Chahal is also charged with failing to register as a Commodity Pool Operator, a legal requirement.
Between January 1, 2015, and December 31, 2017, the defendants allegedly solicited over $1.2 million from approximately 50 investors for the Kane Capital commodity pool. The pool traded futures contracts on indices like the Nasdaq 100 and S&P 500, as well as volatility and crude oil. However, the complaint alleges the trading was largely unsuccessful, resulting in significant losses.
The CFTC claims Chahal and Kane Capital concealed these losses by falsely reporting annual trading profits between 28% and 34%, even while the pool was operating at a loss. Evidence suggests Chahal altered trading account statements using a PDF editing tool to fabricate these positive returns and attract new investors.
Furthermore, the complaint details a Ponzi-like scheme where new investor deposits were used to pay earlier investors. Defendants are also accused of using pool funds to cover Chahal’s personal expenses, including rent, utilities, and credit card bills, effectively commingling funds.
The CFTC is seeking full restitution for defrauded investors, disgorgement of any ill-gotten gains, civil monetary penalties, and a permanent ban on Chahal and Kane Capital from engaging in future commodity trading and registration. A permanent injunction is also being sought to prevent further violations of federal commodities laws.
In a related criminal case, Chahal faces a nine-count indictment brought by the U.S. Attorney’s Office for the Eastern District of Virginia, including four counts of commodities fraud.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office, the Virginia State Corporation Commission, and the SEC Division of Enforcement in this matter.
Source: CFTC.gov
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