Las Vegas resident Gordon A. Driver is facing charges of fraud following a CFTC complaint filed on May 14, 2009, in the Federal District Court in Los Angeles, California. The CFTC alleges Driver orchestrated a $13.5 million Ponzi scheme through his companies, Axcess Automation LLC and Axcess Fund Management LLC.
The complaint details that from February 2006 through May 2009, Driver and his companies fraudulently solicited investments from over 100 participants in the United States and Canada. They are accused of misappropriating participant funds and operating a Ponzi scheme, using new investor money to pay existing investors as purported profits and withdrawals.
According to the CFTC, Driver misrepresented the profitability of his trading, claiming monthly profits around 20 percent and providing false account statements to support these claims. However, of the $13.5 million collected from investors, only approximately $3.7 million was actually used for trading, resulting in $3.5 million in losses – a 95 percent loss of invested funds. Furthermore, participant funds were allegedly commingled with personal funds.
The CFTC alleges that Driver failed to disclose the limited amount of funds being traded or the substantial losses incurred. He is also accused of using participant funds for personal expenses, including cash withdrawals at Las Vegas casinos. In addition to the fraud charges, Driver and Axcess Automation are charged with illegally operating as unregistered commodity pool operators, while Axcess Fund Management, a registered CPO, is accused of failing to maintain accurate books and records as required by the CFTC.
The CFTC is seeking preliminary and permanent injunctions against Driver and his companies, as well as restitution, disgorgement of ill-gotten gains, and civil monetary penalties. The U.S. Securities and Exchange Commission, the Ontario Securities Commission, and the U.S. Attorney’s Office for the Central District of California assisted in the investigation.
The case is being handled by CFTC staff members W. Derek Shakabpa, Judith M. Slowly, Michael R. Berlowitz, David Acevedo, Lenel Hickson, Jr., and Vincent A. McGonagle.
Source: CFTC.gov
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