Joseph A. Dawson, 42, of Fox Lake, Illinois, has been ordered to pay a $2.1 million civil penalty for defrauding investors in a commodity pool scheme, according to a July 13, 2011 announcement by the U.S. Commodity Futures Trading Commission (CFTC).
Judge Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois entered a supplemental consent order on July 5, 2011, imposing the penalty. The CFTC initially charged Dawson and his company, Dawson Trading LLC, with fraudulent solicitation and misappropriation of customer funds. The charges stemmed from a scheme that ran from at least February 2005 to December 2009, during which approximately $2.1 million in participant funds were misappropriated.
Court findings revealed that Dawson used the stolen funds for personal expenses, including a down payment and mortgage payments on a personal residence, an in-ground swimming pool, landscaping, furniture, restaurant bills, movie tickets, and car payments. On April 26, 2011, a consent order permanently barred Dawson from any commodity-related activity, including trading and registration with the CFTC.
In a separate order on July 11, 2011, Judge Kendall also issued a default judgment against Dawson Trading LLC, finding the company liable for Dawson’s violations and for failing to register as a commodity pool operator. Dawson Trading was also ordered to pay a $2.1 million penalty and was prohibited from engaging in any commodity-related activity.
This civil action follows a criminal sentencing in March 2011, where Dawson received 54 months imprisonment and was ordered to pay $3.3 million in restitution to the defrauded pool participants in the case U.S. v. Dawson (09-cr-1037-1, N.D. Ill.).
The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Northern District of Illinois, the Federal Bureau of Investigation, and the Securities and Exchange Commission in the investigation.
Source: CFTC.gov
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