A Florida man and his company have been slapped with hefty penalties following a years-long investigation by the Commodity Futures Trading Commission (CFTC). Randall A. Vest, along with his holding company, Bulletproof Vest, Inc., were subject to a Default Judgment entered by the U.S. District Court for the District of Colorado on April 11, 2018.
The judgment stems from a CFTC enforcement action initially filed on August 6, 2014, alleging commodity futures and off-exchange retail foreign currency (forex) fraud and misappropriation. Also named in the original complaint were Ryan Madigan of Pittsford, New York, and Ryan Tomazin of Stamford, Connecticut.
The court awarded a total of $2,072,181.64 in restitution to the victims of the scheme, along with $1,485,920 in civil monetary penalties. All defendants are permanently banned from trading and registering with the CFTC. Additionally, R2 Capital Group, LLC, Madigan Enterprises, Inc., and RAST Investor Group, LLC – all connected to the individual defendants – were also hit with penalties. The CFTC was awarded $31,812.35 in attorney’s fees and costs specifically against R2 Capital, Madigan, and Madigan Enterprises for failing to comply with discovery requests.
The CFTC alleged that, from at least December 2009 through November 2014, the defendants fraudulently solicited over $2.4 million from at least four investors for a pooled investment fund. This fund traded forex, E-mini S&P 500, and E-mini Dow futures contracts. Investigators found that more than $1.2 million of the pooled funds were misappropriated, with the defendants diverting money to themselves and their holding companies, leaving only a few hundred dollars remaining in the accounts.
The misappropriated funds were allegedly used to cover personal expenses. The complaint detailed illegal commingling of funds, with transfers made directly into the personal bank accounts of the defendants. On March 2, 2018, a final judgment was entered against Ryan Madigan, Madigan Enterprises, and R2 Capital, ordering them to jointly pay $690,727.21 in restitution, a $560,000 civil penalty, and the aforementioned attorney’s fees. A previous order in August 2017 determined that Madigan “personally engaged in various acts of commodities fraud,” including misrepresenting investment returns and his own investment in the pool.
Source: CFTC.gov
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