DANA POINT, CA – July 7, 2009 – Patrick J. Dailey, of Dana Point, California, is facing charges of operating a multi-million dollar fraudulent commodity pool and failing to maintain proper financial records, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on June 30, 2009.
The CFTC alleges that Dailey, along with his company Strongbow Investments GP, LLC, based in Austin, Texas, fraudulently solicited at least $17 million from approximately 22 investors for the Strongbow Investments Fund II commodity pool. Instead of solely investing the funds in commodity futures and options, Dailey is accused of commingling investor money with personal and third-party accounts.
The complaint details that approximately $2.1 million of investor funds remain unaccounted for. Dailey allegedly used investor money for personal benefit, including borrowing up to $1 million to pay off his home equity line of credit. He reportedly repaid these “loans” with further borrowing against his equity line, concealing the transactions from financial statements.
The CFTC further alleges that Dailey failed to disclose these loans to investors in account statements, disclosure documents, or marketing materials. During a National Futures Association audit, Strongbow and Dailey were unable to provide adequate documentation to support their operations, including records of invested funds, allocations, and borrowed money.
The Dailey Family Limited Partnership and Suzi S. Dailey (also known as Suzy and Suzie Dailey), both of Dana Point, California, have been named as relief defendants, as they allegedly received funds resulting from the fraudulent activity.
U.S. District Court Judge Sam Sparks has issued an order freezing the assets of Dailey, Strongbow, and the relief defendants, and has authorized the CFTC to seize relevant records. A preliminary injunction hearing is scheduled for August 7, 2009.
The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, and permanent injunctions against further violations of federal commodities laws. The investigation was aided by the National Futures Association.
Source: CFTC.gov
Related Federal Cases
- Aleksandr Kovalev, Wire Fraud, California 2024 · Washington
- Mervin Barclay Davis, Securities Fraud, California 2013 · Texas
- John Stuart Hill, Real Estate Investment Fraud, California 2024 · Texas
- David Gomez, Chiropractic Billing Mail Fraud, California 2023 · Alaska
- Carl Dean Bullock, Mail and Wire Fraud, California 2024 · Texas
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News