WASHINGTON, D.C. – Mark A. Vanderploeg, formerly of Glendale, Arizona, has been permanently barred from commodity trading after being found liable for a fraudulent scheme involving false reporting to grain elevators and cooperatives. The U.S. Commodity Futures Trading Commission (CFTC) obtained a consent order on December 9, 2011, in the U.S. District Court for the District of Kansas, effectively halting Vanderploeg and his associated companies’ involvement in the commodities market.
Vanderploeg, along with Midwest Land & Livestock, Inc. (MLL), SKV Farms Inc. (SKV), and DCV Farms, Inc., were charged with issuing false reports to grain entities in Kansas, Iowa, Minnesota, Illinois, and South Dakota. The scheme involved pretending to be farmers and entering into forward contracts for over one million bushels of grain during the 2008 harvest, despite lacking the capacity to produce the agreed-upon quantity.
The defendants then used these contracts to engage in hedging activities via short commodity futures contracts. When it became clear they couldn’t fulfill the contracts, Vanderploeg and his companies demanded a share of any hedging gains from the grain entities if prices decreased. However, when prices increased, resulting in losses, they simply disappeared without delivering any grain.
The consent order mandates that Vanderploeg, MLL, SKV, and DCV jointly and severally pay a $70,000 civil monetary penalty, alongside $112,400 in restitution. They are also required to disgorge $200,000 in ill-gotten gains. Furthermore, all parties are banned from any future commodity-related activity, including trading and registration with the CFTC, for a period of five years.
The case was led by CFTC Division of Enforcement staff members Jo Mettenburg, Peter Riggs, Jeff Le Riche, Jennifer Chapin, Stephen Turley, Rick Glaser, and Richard Wagner. The initial complaint was filed following an investigation that began in September 2010.
Source: CFTC.gov
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