WASHINGTON, D.C. – Christopher Hales and Eric Richardson have been ordered to pay over $2.7 million in penalties for commodity fraud, the U.S. Commodity Futures Trading Commission (CFTC) announced today, June 4, 2013. The resolution stems from a complaint filed in May 2012 alleging fraudulent solicitation of funds from investors.
According to court documents filed in the United States District Court for the District of Utah, Central Division, Eric Richardson will pay $100,000 in disgorgement and a $150,000 civil monetary penalty. He is also permanently banned from engaging in any commodity-related activity, including trading and registration with the CFTC. Judge Dee Benson entered a Consent Order for Permanent Injunction against Richardson on May 31, 2013.
A Default Judgment and Permanent Injunction was entered against Hales and his company, Bentley Equities, LLC, on May 14, 2013. Hales is required to pay $382,080 in disgorgement and $1,146,240 in civil monetary penalties, while Bentley must pay an $840,000 civil monetary penalty. Both Hales and Bentley are permanently barred from commodity-related activities.
The CFTC alleged that Hales, Richardson, and Bentley fraudulently solicited over $1.1 million from approximately 39 customers with the intention of trading commodity futures. The investigation revealed that approximately $658,452 of customer funds were misappropriated for personal expenses, including vehicle costs, utilities, credit card bills, and payments to earlier investors, functioning as a Ponzi scheme.
Customers were allegedly misled about the profitability of the trading, with the defendants concealing losses exceeding $482,000. False statements were also issued to certain investors. Hales is currently incarcerated at the Federal Correctional Institution in Safford, Arizona, while Richardson is serving his sentence at the Florence Federal Correction Complex in Florence, Colorado.
In related criminal cases, Hales was sentenced to over seven years in prison and ordered to pay $12,719,236 in criminal restitution (United States v. Christopher D. Hales, No. 2:10-CR-183-TS-SA-1, C. D. UT, Sept. 2, 2010). Richardson received a year and a day in prison and was ordered to pay $110,000 in criminal restitution (United States v. Eric A. Richardson, No. 2:12-CR-00354, C.D. UT, June 27, 2012).
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 FBI in the investigation.
Source: CFTC.gov
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