Naples, Florida resident Dorian Garcia and his affiliated companies have been ordered to pay over $12.5 million in restitution and penalties for operating a Ponzi scheme that defrauded investors between 2010 and 2015. The U.S. Commodity Futures Trading Commission (CFTC) announced the final judgment entered by the U.S. District Court for the Middle District of Florida on June 28, 2016.
Garcia, along with DG Wealth Management (DG Wealth), Macroquantum Capital LLC, UKUSA Currency Fund, and DG Wealth’s successor, Quanttra LP, were collectively required to pay $5,051,052 in restitution to victims. Additionally, the court imposed a $7.5 million civil monetary penalty and ordered the defendants to disgorge $4,948,571 in ill-gotten gains. The judgment stems from a CFTC complaint filed in April 2015 alleging fraud, misappropriation of funds, false account statements, and violations of CFTC registration requirements.
The court found that Garcia fabricated account and bank statements to attract investors, falsely portraying multi-million dollar balances and profits despite having no proven trading track record. He allegedly solicited over $7.3 million from at least 95 investors, leaving a shortfall of approximately $3.3 million, which was used for personal and business expenses. Garcia also misled investors by claiming he was exempt from CFTC registration and falsely stated he had a licensed broker executing trades based on his system.
This civil case runs parallel to a criminal prosecution where Garcia pleaded guilty to wire fraud in July 2015 and was sentenced to 78 months in prison and ordered to forfeit over $3 million. He also agreed to pay $5,318,052.02 in criminal restitution. The CFTC judgment, along with previous consent and sanctions orders, effectively resolves the case.
The court’s orders include permanent trading and registration bans, preventing Garcia and his companies from further violations of the Commodity Exchange Act and CFTC Regulations.
Source: CFTC.gov
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