Frank J. Collins of Garden Grove, California, and Gerard Suite of Irvine, California, along with their company STA Opus NRLLC, are facing charges of commodity pool fraud following a civil enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) in the U.S. District Court, Central District of California.
The CFTC alleges that Collins and Suite fraudulently solicited at least $1.6 million from over 30 customers to operate a commodity pool, then misappropriated approximately $1.25 million of those funds for personal use. The complaint further alleges the defendants issued false account statements to conceal the losses and operated as an unregistered Commodity Pool Operator (CPO) and Associated Persons.
From at least January 2013, Collins and Suite, through STA Opus, reportedly falsely claimed the commodity pool generated positive annual returns. However, the three commodity futures trading accounts held by STA Opus actually experienced negative returns, resulting in virtually all committed funds being lost. The scheme extended to requesting “voided” personal checks from customers, providing access to their bank account information and enabling direct withdrawals.
The CFTC also alleges that Collins and Suite failed to disclose prior sanctions against Suite, which included revocation of his CFTC registration, an injunction for violating the California Corporations Act, and a $2.5 million restitution and fine order for operating as an unregistered investment advisor in California.
The CFTC is seeking full restitution for defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of federal commodities laws. The investigation received assistance from the Federal Bureau of Investigation (Orange County, California) and the U.S. Attorney’s Office for the Central District of California.
Customers are encouraged to report suspicious activities to the CFTC via the toll-free hotline 866-FON-CFTC or through the online tip/complaint submission system.
Source: CFTC.gov
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