Hasaan R. Steel, of Brooklyn, New York, was charged with fraud by the U.S. Commodity Futures Trading Commission (CFTC) on February 9, 2011, for allegedly defrauding 28 participants out of more than $1 million. The CFTC filed a civil complaint in the U.S. District Court for the Eastern District of New York on February 7, 2011, alleging Steel fraudulently solicited investments for a commodity pool intended to trade commodity futures and securities.
According to the complaint, Steel, who never registered with the CFTC, misrepresented his trading history to prospective investors, claiming monthly returns of 20 to 100 percent. However, trading records indicate he only actively traded for nine months during the scheme’s operation, with positive returns in only three of those months. The CFTC alleges Steel opened no pooled trading account and only utilized approximately $133,000 – 13.1 percent – of the $1 million collected from investors for actual trading.
The majority of the funds, the complaint states, were misappropriated for personal expenses including gambling, food, utilities, and hotel costs, with some funds also allegedly distributed to family members. To maintain the illusion of successful trading, Steel is accused of providing false statements and fabricated account snapshots to participants regarding the pool’s activity, performance, and balances.
The CFTC is seeking disgorgement of ill-gotten gains, restitution for defrauded participants, civil monetary penalties, rescission of contracts, permanent trading and registration bans, and a permanent injunction against further violations of federal commodities laws. Judge Nicholas G. Garaufis issued an order on February 7, 2011, freezing Steel’s assets and preventing the destruction of relevant records, and scheduled a hearing on the CFTC’s motion for a preliminary injunction for February 16, 2011.
Steel was arrested and arraigned on February 7, 2011, in connection with a related criminal complaint. The CFTC worked in conjunction with the U.S. Attorney’s Office for the Eastern District of New York on this case.
Source: CFTC.gov
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