Jeffrey Shalhoub, of Staten Island, New York, is facing charges of operating a commodity futures Ponzi scheme, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on May 17, 2010, in the U.S. District Court for the Eastern District of New York.
The CFTC alleges that Shalhoub, along with his company Jeff Shalhoub Investments (JSI) of Long Island City, N.Y., fraudulently solicited approximately $300,000 from at least 12 individuals – primarily friends and family of his ex-wife – with the promise of high returns through futures trading.
Investigators claim Shalhoub commingled customer funds with his personal accounts and misappropriated at least $154,500 for personal use. He is accused of guaranteeing monthly returns ranging from 10 to 36 percent, falsely claiming the returns were generated by successful trading. The CFTC contends these “profits” were actually paid using funds from new investors, characteristic of a Ponzi scheme.
The complaint further details that Shalhoub allegedly provided fabricated account statements to customers, falsely reporting weekly gains of up to 5.2 percent, despite consistent monthly losses. These misleading statements were allegedly intended to conceal the fraudulent activity and maintain investor confidence.
The CFTC is seeking disgorgement of ill-gotten gains, restitution for defrauded customers, civil monetary penalties, and a ban on Shalhoub’s future trading and registration activities. The case is being pursued by CFTC staff members Elizabeth Davis, Jennifer Best, Jessica Harris, Michael Loconte, Erica Bodin, Kenneth W. McCracken, Rick Glaser, and Richard Wagner.
This case was announced on May 19, 2010, from Washington, D.C.
Source: CFTC.gov
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