Lon Olen Friedrichsen, of Alton, Iowa, has been charged with fraud and failure to register as a Commodity Trading Advisor, according to a complaint filed by the Commodity Futures Trading Commission (CFTC) in the U.S. District Court for the Southern District of New York on March 5, 2018.
The CFTC alleges that from December 16, 2014, through May 24, 2017, Friedrichsen engaged in a fraudulent scheme to solicit clients throughout the United States, including New York, using false names – Lon Kummer and Lon Richardson – and making false statements. He allegedly advertised his services via Craigslist, telephone, and email.
According to the complaint, Friedrichsen falsely claimed trading successes, omitted crucial facts, and guaranteed profits to potential clients. He also allegedly prepared falsified trading statements to induce individuals to grant him access to their commodity futures accounts held with Futures Commission Merchants. Once access was granted, Friedrichsen is accused of trading on their behalf and instructing them to conceal his involvement.
The CFTC claims Friedrichsen demanded 50% of any profits generated while swiftly abandoning clients when losses occurred. The alleged scheme fraudulently obtained at least $396,735 from at least twelve clients, resulting in losses of at least $160,382 and illicit gains of at least $45,369 for Friedrichsen.
The CFTC is seeking restitution for defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA). The case is being litigated by Jason Mahoney, Dmitriy Vilenskiy, Lucy Hynes, George Malas, A. Daniel Ullman II, and Paul G. Hayeck of the CFTC’s Division of Enforcement.
Individuals who suspect fraud or violations of commodity trading laws are encouraged to contact the CFTC via its toll-free hotline at 866-FON-CFTC (866-366-2382) or submit a tip online.
Source: CFTC.gov
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