Cedarburg, WI – Eric N. Schmickle was ordered to pay roughly $5.1 million in restitution and penalties for running a commodity futures Ponzi scheme, the Commodity Futures Trading Commission (CFTC) announced today. The order, entered on April 19, 2013, by Judge Rudolph T. Randa of the U.S. District Court for the Eastern District of Wisconsin, also permanently bans Schmickle from trading and registering with the CFTC.
The CFTC found that from May 2009 through April 2012, Schmickle defrauded investors through Q Wealth Management Inc. and Aquinas SF LLC. He solicited approximately $5.2 million from one managed client and ten pool participants. Schmickle lost over $2.9 million in trading and fees and allegedly misappropriated around $647,000 for personal use.
To maintain the scheme, Schmickle fabricated account statements and tax forms, falsely reporting investment gains instead of actual losses. He also billed a client for commissions on these fictitious gains, according to the Order. The total financial impact of the fraud is estimated at $3.6 million in restitution, plus a $1.5 million civil penalty to be paid jointly with his company, Q Wealth Management Inc.
This ruling follows a related criminal case where Schmickle pleaded guilty to wire fraud on August 31, 2012, and was sentenced to 36 months in prison on February 26, 2013, by Judge Randa. The CFTC collaborated with the U.S. Attorney’s Office (Eastern District of Wisconsin) and the Federal Bureau of Investigation (Milwaukee Division) throughout the investigation.
The case was led by CFTC staff members David Chu, Mary Beth Spear, Ava Gould, Scott Williamson, Rosemary Hollinger, and Richard Wagner.
The order was issued on April 23, 2013.
Source: CFTC.gov
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