OMAHA, NEBRASKA – Michael J. Welke of Omaha, Nebraska, has been ordered to pay $387,000 to settle fraud charges brought by the U.S. Commodity Futures Trading Commission (CFTC), officials announced today, February 13, 2013. The settlement, finalized on February 12, 2013, by Chief Judge Laurie Smith Camp of the U.S. District Court for the District of Nebraska, includes a $257,000 disgorgement payment and a $130,000 civil monetary penalty.
Welke is also subject to a permanent trading and registration ban, prohibiting him from violating provisions of the Commodity Exchange Act and CFTC Regulations. The case stems from a complaint filed in May 2011 alleging a fraudulent scheme operated by Welke, along with Jonathan W. Arrington, Michael B. Kratville, Elite Management Holdings Corp., and MJM Enterprises LLC.
According to the CFTC, from approximately August 2005 through July 2008, the group solicited over $4.7 million from more than 130 commodity pool participants, primarily in the Omaha area, to invest in commodity futures and off-exchange foreign currency contracts. The CFTC alleged that Welke acted as a reference for potential investors without disclosing his ownership and officer positions within Elite Management and MJM.
Investigators found that Welke and his co-defendants misappropriated over $1.5 million of investor funds and made false claims about the profitability and value of participant accounts. The CFTC has already secured default judgments against Arrington, Elite Management, and MJM. Litigation against Kratville is ongoing.
The CFTC’s enforcement team included Christopher Reed, Margaret Aisenbrey, Stephen Turley, Charles Marvine, Rick Glaser, and Richard Wagner.
Source: CFTC.gov
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