Valrico, FL – Commodity trader Michael Gomez, along with air traffic controllers Louis J. Giddens, Jr. and Anthony W. Dutton, have been charged with operating a fraudulent foreign currency (forex) scheme, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on June 23, 2011. The defendants allegedly solicited approximately $1.4 million from the general public.
The CFTC alleges that from January to October 2010, Giddens and Dutton operated commodity pools – Currency Management Group, LLC and Pinnacle Capital Partners, LLC – and fraudulently accepted funds from investors primarily in Georgia and Florida. These funds were then transferred to Pinnacle Trade Group, LLC, and subsequently to accounts controlled by Gomez, who traded the funds on behalf of investors.
The complaint claims that only a portion of the investor funds were actually used for forex trading, with the remainder misappropriated by Gomez and Dutton. The defendants are accused of misrepresenting the profitability of investments to pool participants, promising guaranteed monthly returns of five or ten percent through face-to-face meetings, phone calls, and promissory notes. They also allegedly created false online account statements to support these claims.
On June 24, 2011, Judge William S. Duffey, Jr. of the U.S. District Court for the Northern District of Georgia, issued a restraining order freezing Gomez’s assets and preventing the destruction of relevant records.
The CFTC is seeking restitution for defrauded customers, disgorgement of any ill-gotten gains, a civil monetary penalty, permanent trading and registration bans, and a permanent injunction against further violations of federal commodities laws. The case is being pursued through the CFTC’s Division of Enforcement, with assistance from the U.S. Attorney’s Office (Civil Division) for the Northern District of Georgia, the Financial Industry Regulatory Authority, and the Swiss Financial Market Supervisory Authority.
The defendants have not yet responded to the charges as of July 5, 2011, the date of the CFTC’s last update on the case.
Source: CFTC.gov
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