Damian Castilla and two companies he controlled, DCAST Capital Investments LLC and Five Traders LLC, have been ordered to pay over $9 million in restitution and penalties for defrauding investors, the Commodity Futures Trading Commission (CFTC) announced. The U.S. District Court for the Southern District of Florida entered consent and final judgment orders against the defendants on December 6, 2022, and April 6, respectively, resolving a lawsuit filed by the CFTC on May 17, 2022.
The court found Castilla and the companies liable for fraudulently soliciting investments from over 50 individuals and misappropriating their funds. Defendants also made false statements to the CFTC during the agency’s investigation. The orders require a total of $2,687,440 in restitution to the defrauded pool participants, alongside $3,350,000 in disgorgement – funds representing ill-gotten gains.
Castilla personally faces a $3 million civil monetary penalty. DCAST Capital and Five Traders, collectively, are assessed a $10,050,000 civil monetary penalty. All defendants are permanently banned from violating the Commodity Exchange Act (CEA) and CFTC regulations, and are subject to permanent trading and registration bans.
Between January 2014 and May 2022, the defendants allegedly misrepresented their trading performance to potential investors, claiming significant profits from futures trading. However, their trading was largely unprofitable. Instead of trading participant funds as promised, the defendants allegedly diverted the money for personal expenses, including car payments, home renovations, lawn care, clothing, and dining. They further concealed the fraud by issuing false account statements showing fabricated profits in nonexistent accounts and using new investor funds to pay earlier investors, creating a Ponzi-like scheme.
The defendants also failed to register with the CFTC as required. During the investigation, they provided false information in response to a CFTC subpoena, failing to disclose over 40 investors who collectively provided nearly $2 million. The CFTC cautions that restitution orders do not guarantee full recovery of lost funds, as the defendants may lack sufficient assets.
The case was led by Elsie Robinson, Paul Flucke, Nicholas Sloey, Thomas Simek, Christopher Reed, and Charles Marvine of the CFTC’s Division of Enforcement. The CFTC urges the public to verify a company’s registration status before investing and provides resources on commodity pool fraud prevention.
Source: CFTC.gov
Related Federal Cases
- Marc Henry Menard, Investment Fraud Scheme, Mineola NY, 2023 · Pennsylvania
- Marc Henry Menard, Investment Fraud Scheme, New York, 2023 · Pennsylvania
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2023 · Florida
- Juan A. Tony Marrero, Medicare Fraud Scheme, Miami FL, 2024 · Florida
- Viviane Cazeau, Bank Fraud Scheme, Massachusetts, 2023 · Florida
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News