Lon Olen Friedrichsen of Alton, Iowa, is facing charges of fraud and failure to register as a Commodity Trading Advisor, according to a civil enforcement action filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Southern District of New York.
The CFTC alleges that from December 16, 2014, through May 24, 2017, Friedrichsen engaged in a fraudulent scheme to solicit clients across the United States, including New York. He reportedly used aliases – Lon Kummer and Lon Richardson – while omitting their falsity during solicitations.
The complaint details that Friedrichsen utilized Craigslist ads, phone calls, and emails to attract investors. These communications allegedly contained false statements regarding his trading successes, omitted crucial information, and even guaranteed profits – all violations of the Commodity Exchange Act (CEA). He also allegedly fabricated trading statements to mislead potential clients.
Friedrichsen is accused of gaining access to clients’ commodity futures accounts held with Futures Commission Merchants, trading within those accounts, and instructing clients to conceal his involvement. The scheme involved demanding 50% of any generated profits while abandoning clients after incurring losses. The CFTC claims Friedrichsen fraudulently obtained at least $396,735 from a minimum of twelve clients.
Of the funds solicited, at least $160,382 was reportedly lost, while Friedrichsen allegedly retained $45,369 in fees. The CFTC is seeking restitution for defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, and a permanent ban on registration and trading, alongside a permanent injunction against future CEA violations.
The case is being pursued by CFTC staff members Jason Mahoney, Dmitriy Vilenskiy, Lucy Hynes, George Malas, A. Daniel Ullman II, and Paul G. Hayeck.
Source: CFTC.gov
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