Christopher D. Hales and Eric A. Richardson are facing federal charges of fraud and misappropriation related to commodity futures trading, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on May 2, 2012, in the U.S. District Court for the District of Utah.
The CFTC alleges that from April 2009 through August 2010, Hales, Richardson, and their company, Bentley Equities, LLC, fraudulently obtained over $1.1 million from approximately 38 investors to trade commodity futures. The defendants claimed to be profitable traders managing over $1 million in accounts, but the CFTC claims they never managed more than $480,000 at any given time and ultimately lost around $1,296,600 of investor funds.
The complaint details that at least $628,000 of customer funds were allegedly misappropriated for personal expenses, including food, clothing, vehicle costs, and credit card bills. A portion of the stolen funds was also used to pay earlier investors, a hallmark of a Ponzi scheme. To cover up their losses, the defendants are accused of falsifying account statements, inflating balances and reporting false profits.
The CFTC is seeking an emergency restraining order to freeze the defendants’ assets and prevent the destruction of records. They are pursuing civil monetary penalties, restitution, disgorgement of ill-gotten gains, trading and registration bans, and injunctions against future violations of commodities laws.
Hales is currently incarcerated at the Florence, Colorado Federal Correction Complex. He was previously sentenced in November 2011 to over seven years in prison and ordered to pay $12,719,236 in restitution in a related criminal case involving mortgage fraud. Richardson resides in Cedar Hills, Utah. Neither defendant was registered with the CFTC.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the District of Utah, the U.S. Department of Housing and Urban Development—Office of Inspector General, the U.S. Postal Inspection Service, and the Federal Bureau of Investigation in this matter.
Source: CFTC.gov
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