Richard D. Carter, Commodity Fraud, Illinois 2020
Richard D. Carter of Illinois has been ordered to pay over $2.6 million in restitution and penalties for his role in a $1.76 million commodity pool fraud, the U.S. Commodity Futures Trading Commission (CFTC) announced on January 10, 2020. The U.S. District Court for the Northern District of Illinois entered a Consent Order for Permanent Injunction against Carter on January 8th.
Carter is required to pay $838,642 in restitution and a civil monetary penalty of $1,760,022. The order also permanently bans him from trading and registering with the CFTC, and prohibits further violations of the Commodity Exchange Act. The charges stem from a CFTC complaint filed in January 2018 alleging fraud, misappropriation, and failure to register.
From April 2014 to January 2018, Carter allegedly misrepresented key information to investors in the Blue Guru commodity pool. He claimed funds would be used to trade futures contracts, specifically Dow Jones E-mini and S&P 500 E-mini contracts, but less than two-thirds of the $1.76 million received was actually used for trading. Carter promised an 8% annual return plus 50% of any trading profits, and provided fabricated account statements showing false gains. In reality, the pool lost over $500,000, with Carter directly responsible for half of those losses.
The order also found that Carter misappropriated $586,674 of investor funds, ignored withdrawal requests, and lied about the reasons for delayed disbursements. Co-defendant Mark R. Slobodnik previously received a similar injunction in November 2018, and Blue Guru, LLC, was subject to a default judgment in May 2018, with combined penalties exceeding $6 million.
Carter pleaded guilty to wire fraud in a related criminal case on August 27, 2019, and is scheduled for sentencing on February 13, 2020. The case is United States v. Carter, Case No. 1:18-cr-00154, filed in the Northern District of Illinois on May 10, 2018.
The CFTC advises that recovery of funds for victims is not guaranteed, as wrongdoers may lack sufficient assets. The agency continues to pursue cases to protect customers and hold accountable those who commit fraud. The CFTC acknowledged the assistance of the U.S. Attorney’s Office for the Northern District of Illinois and the Federal Bureau of Investigation in this matter.
Source: CFTC.gov
Source: https://www.cftc.gov/PressRoom/PressReleases/8102-19