WOODLAND HILLS, CA – Lyndon Lydell Parrilla, 41, was arrested April 12, 2011, and faces federal charges following a CFTC investigation into a multi-million dollar foreign exchange (forex) scheme. The U.S. Commodity Futures Trading Commission (CFTC) filed a complaint on April 12, 2011, in the U.S. District Court for the District of Massachusetts, alleging Parrilla and his company, Green Tree Capital, defrauded at least 50 customers out of $4 million since at least 2009.
Judge Joseph L. Tauro issued a restraining order on April 13, 2011, freezing the assets of Parrilla and Green Tree Capital and prohibiting the destruction of financial records. The CFTC alleges Parrilla and his company solicited funds for off-exchange forex trading on a leveraged basis, but failed to register as a Commodity Trading Advisor (CTA) or Associated Person (AP) with the CFTC.
According to the complaint, Parrilla and Green Tree Capital misrepresented the investment’s performance, their experience, assets under management, and promised refunds upon request. They also allegedly failed to disclose Parrilla’s permanent bar from NFA membership. The CFTC claims Green Tree Capital falsely advertised consistently profitable returns when, in reality, the company incurred trading losses and approximately 80% of customer funds were never invested.
Investigators discovered at least $2.9 million in customer funds were misappropriated for personal expenses, including gambling in Las Vegas, vehicle and clothing purchases, entertainment, and cash withdrawals exceeding $1.65 million. False account statements were allegedly sent to customers via email to conceal the losses and misappropriation.
The CFTC is seeking rescission of contracts, 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 federal commodities laws. This case is part of a joint enforcement effort with the Federal Bureau of Investigation (FBI) and the U.S. Attorney’s Office for the District of Massachusetts, who filed a separate criminal action against Parrilla on April 5, 2011.
As of April 14, 2011, Parrilla was in custody in Southern California. The investigation is ongoing.
Source: CFTC.gov
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