Rochester, New York – Michael A. Kardonick and Gary R. Shapoff have been banned from all CFTC-regulated activity following a federal court order issued on January 21, 2015. The U.S. Commodity Futures Trading Commission (CFTC) brought the case against Kardonick, Shapoff, and the firms Atwood & James, Ltd. and Atwood & James, SA, alleging a fraudulent scheme to solicit funds for forex options trading.
The court assessed a civil monetary penalty of $2,164,059.57 against all defendants, recognizing a pre-existing criminal restitution award. Kardonick and Shapoff are currently incarcerated, having previously pleaded guilty to charges of tax evasion and money laundering. Kardonick received a 120-month prison sentence, while Shapoff was sentenced to 60 months.
According to the CFTC’s complaint, from at least 2001 to 2008, the defendants fraudulently solicited funds from retail clients worldwide, including in the U.S. and the U.K., promising extraordinary returns through forex options trading. The CFTC alleged that Atwood and Kardonick misappropriated client funds. The defendants operated without being registered with the CFTC, as required.
The court found that Atwood and Kardonick were not successful traders and that no trading accounts benefiting Atwood clients could be located. Kardonick’s personal trading accounts, between 2003 and 2008, resulted in net losses of approximately $1.7 million. Furthermore, Kardonick and Shapoff failed to disclose prior criminal convictions for mail and wire fraud, as well as previous CFTC reparations actions against Shapoff involving misrepresentation and misuse of customer funds.
The $2,164,059.57 criminal restitution order was issued jointly and severally against Kardonick and Shapoff. The CFTC cautioned that victims may not fully recover their losses due to potential limitations in the defendants’ assets. The investigation involved cooperation with the U.S. Attorney’s Office for the Western District of New York, the FBI, the Brazilian Comissão de Valores Mobiliarios, and the U.K. Financial Conduct Authority.
Source: CFTC.gov
Related Federal Cases
- Todd Faustin, Workers’ Compensation Fraud, New York NY, 2023 · New York
- Michael Smith, Billion-Stream Royalty Heist, New York, 2023 · New York
- Kenneth Thom, Investment Adviser Fraud, New York NY, 2026 · New York
- Kenneth Thom, Investment Adviser Fraud, New York NY, 2023 · New York
- Michael Smith, AI-Fueled Streaming Scam, New York NY, 2023 · New York
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News