BOCA RATON, FL – On April 21, 2015, the U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action against John Pakel, of Del Ray, Florida, and his company, Sentry Asset Group, LLC (SAG), in the U.S. District Court for the Southern District of Florida. Pakel is accused of orchestrating a fraudulent scheme involving illegal, off-exchange precious metals transactions with retail customers.
The CFTC complaint alleges that from at least March 2012 through July 2013, SAG, under Pakel’s direction, solicited customers via telephone to participate in leveraged, margined, or financed precious metals transactions. Customers reportedly paid over $1.1 million to SAG for these transactions, resulting in $278,767 in commissions and fees for the company. The CFTC further claims that SAG operated as an unregistered Futures Commission Merchant.
These transactions violated the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which prohibits leveraged, margined, or financed transactions unless actual delivery of the metal occurs within 28 days. According to the complaint, no such delivery ever took place for SAG’s customers.
The illegal transactions were allegedly executed through several other companies including Lloyds Commodities, LLC, Hunter Wise, LLC, and AmeriFirst Management LLC, all of which have been the subject of prior CFTC enforcement actions. Courts have already issued rulings against AmeriFirst and Lloyds, finding them liable for similar violations and ordering restitution and penalties totaling over $5 million. Hunter Wise was also found to have lacked the actual metal to fulfill customer orders and violated registration requirements.
Pakel, as the controlling person of SAG, is held liable for the company’s violations of the Commodity Exchange Act (CEA). The specifics of any potential penalties or restitution for Pakel were not immediately available in the release, but the CFTC is seeking appropriate relief for the fraudulent activity.
Source: CFTC.gov
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