Kevin G. White, of The Woodlands, Texas, was hit with a hefty penalty and permanent trading ban following a fraudulent scheme involving the Revelation Forex Fund, LP, according to a Consent Order entered by Judge Richard A. Schell of the U.S. District Court for the Eastern District of Texas on March 30, 2015.
White, along with RFF GP, LLC and KGW Capital Management, LLC, was ordered to jointly pay a $4,150,000 civil monetary penalty and $3,365,888 in restitution. The CFTC originally filed a complaint against the defendants on July 9, 2013, alleging fraud and misappropriation of funds from investors in the commodity pool.
The scheme involved falsely promising investors profits through off-exchange foreign currency trading. Defendants fraudulently solicited approximately $7.4 million from over 20 pool participants. Approximately $1.7 million of those funds were misappropriated, with White using the money for personal expenses including gym memberships, retail purchases, meals, travel, and even dog training, the court found.
The defendants fabricated the fund’s performance and misrepresented White’s investment experience during solicitations made through websites and at a tradeshow presentation. This case was pursued in conjunction with the Securities and Exchange Commission, who filed a related complaint against White.
White’s legal troubles extend beyond the CFTC’s action. On February 18, 2015, he was sentenced to eight years in prison for mail fraud in a separate criminal case. The CFTC acknowledges that restitution orders do not guarantee full recovery of lost funds, and urges caution to potential victims.
The investigation involved cooperation between the CFTC, the SEC, the U.S. Attorney’s Office for the Eastern District of Texas, the Federal Bureau of Investigation, and the Nevada Office of the Attorney General.
Source: CFTC.gov
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