Chicago, IL – Edward R. Velazquez was ordered to pay over $11.6 million in restitution and penalties for commodity fraud, according to a consent order issued by the U.S. Commodity Futures Trading Commission (CFTC) and entered by the United States District Court for the Northern District of Illinois on January 31, 2008. The case stems from a complaint originally filed on September 8, 2004.
Velazquez, along with the companies he controlled – V-Tek Trading Group, Inc., V-Tek Capital, Inc. (IL), and V-Tek Capital, Inc. (BVI) – were found to have defrauded at least 121 foreign and U.S. customers. These customers invested approximately $8.88 million in V-Tek Capital companies under the false pretense of purchasing “common stock,” “convertible preferred stock,” or “convertible preferred fixed income.” Customers only received approximately $2.48 million back, leaving a shortfall of roughly $6.4 million. An additional $300,000 was found to be owed to V-Tek Trading Group, Inc. customers.
The court determined that approximately $3 million of the customer funds were used by Velazquez to trade commodity futures and foreign currencies between September 2003 and September 2004. This trading resulted in losses of around $1.1 million. Furthermore, Velazquez misappropriated customer funds and made false statements to clients through the use of the internet and other means, including misrepresenting trading performance records from 1995-1999.
Specifically, the court found that Velazquez misappropriated at least $1.03 million from a V-Tek Capital (IL) bank account. As part of the consent order, Velazquez and the companies are required to pay $6,742,116 in restitution to defrauded customers, and a civil monetary penalty of $4,951,332. The order also permanently prohibits Velazquez and the associated companies from engaging in further violations of commodity trading laws, and from participating in future commodity trading on behalf of themselves or others.
The CFTC’s enforcement action was led by Susan Gradman, William Janulis, Judy McCorkle, Venice Bickham, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
Source: CFTC.gov
Related Federal Cases
- Letitia James, Securities Fraud, New York 2023 · Washington
- Eric Holub, Tax Withholding Fraud, Cedar Rapids IA, 2023 · Illinois
- Terry L. Gantt, ID Theft and Wire Fraud, Cedar Rapids IA, 2012 · Illinois
- Abel Hernandez-Labra, Passport Fraud, Hampton IA, 2023 · Illinois
- Princess L. Eatmon, Student Loan Wire Fraud, Albany GA, 2023 · Illinois
