Mesa, Arizona resident Derek Springfield and his company, Draven, LLC, are facing civil charges of commodity fraud filed by the U.S. Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the District of Arizona. The complaint alleges a fraudulent scheme targeting at least 86 individuals, soliciting over $1.46 million for investments in commodity futures and foreign currency exchange (forex).
The CFTC alleges that from July 2014 through December 2016, Springfield and Draven misled investors by claiming funds would be placed in segregated accounts and traded by experienced professionals. However, the agency contends the defendants misappropriated funds for corporate and personal expenses, and only a small portion of the collected money was actually traded.
According to the complaint, Springfield executed trades through accounts in his own name, but incurred substantial losses. To conceal these losses and the misappropriated funds, the defendants allegedly fabricated account statements showing profitable results. Furthermore, the operation allegedly functioned as a Ponzi scheme, using new investor funds to pay returns to existing investors requesting withdrawals.
Neither Draven, LLC, nor Derek Springfield were registered with the CFTC as required for their activities as a Commodity Pool Operator or Associated Person. The CFTC is seeking restitution for defrauded clients, disgorgement of ill-gotten gains, a civil monetary penalty, permanent registration and trading bans, and a permanent injunction against future violations of federal commodities laws.
The case is being litigated by Michelle Bougas, Alan Edelman, James H. Holl, III, and Rick Glaser of the CFTC’s Division of Enforcement. The CFTC also issued a Commodity Pool Fraud Advisory, warning investors of the warning signs of such schemes.
Source: CFTC.gov
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