Raleigh, NC – Dennis Todd Hagemann was ordered to pay over $1.6 million in restitution and penalties for operating a foreign currency (forex) Ponzi scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced on March 10, 2011. The federal default judgment, entered by Chief U.S. District Judge Louise W. Flanagan of the U.S. District Court for the Eastern District of North Carolina, also permanently bans Hagemann from engaging in any commodity-related activity and registering with the CFTC.
Hagemann and his company, Yellowstone Partners, Inc., were found to have fraudulently solicited $1,505,000 from at least 25 investors between September 2009 and March 9, 2010. The CFTC’s investigation revealed that Hagemann misappropriated approximately $1.3 million of customer funds, running a classic Ponzi scheme where earlier investors were paid with money from new investors.
According to the court order, Hagemann falsely claimed extensive experience and success in forex trading, promising investors returns of 100 to 300 percent. He also allegedly misrepresented having well-placed contacts and control over $500 million in assets to entice individuals to participate in the scheme. The judgment requires Hagemann and Yellowstone Partners to jointly and severally pay $827,779 in restitution and a civil monetary penalty of the same amount.
Hagemann was initially arrested on March 10, 2010, by North Carolina authorities on charges brought by the North Carolina Securities Division, working in conjunction with the CFTC. The CFTC acknowledged the assistance of the North Carolina Department of the Secretary of State, Securities Division, in the investigation and prosecution of the case.
The CFTC clarified that Yellowstone Partners, Inc. is distinct from Yellowstone Partners, LLC, a separate, SEC-registered Investment Adviser based in Idaho Falls, Idaho.
Source: CFTC.gov
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