Chicago, IL – Richard D. Carter of Illinois has been permanently banned from trading and registration with the Commodity Futures Trading Commission (CFTC) following a $1.76 million commodity pool fraud scheme, authorities announced. The U.S. District Court for the Northern District of Illinois entered a Consent Order on January 8th, imposing significant financial penalties and restrictions on Carter.
Carter is required to pay $838,642 in restitution to defrauded investors and a civil monetary penalty of $1,760,022. The CFTC initially filed a complaint against Carter, co-defendant Mark R. Slobodnik, and their company, Blue Guru, LLC, on January 12, 2018, alleging fraud, misappropriation of funds, and failure to register with the agency.
According to the order, between April 2014 and January 2018, Carter knowingly misled investors about the performance of the Blue Guru commodity pool. He falsely claimed funds would be invested in futures contracts – specifically Dow Jones E-mini and S&P 500 E-mini contracts – but less than two-thirds of the $1.76 million raised was actually used for trading. Carter promised investors an 8% annual return plus 50% of any profits, backing up these claims with fabricated account statements, while the pool actually suffered over $500,000 in losses, with Carter directly responsible for half of them.
The investigation revealed Carter misappropriated $586,674 of investor funds, ignored requests for withdrawals, and fabricated reasons to delay payouts. Slobodnik previously received a permanent injunction on November 13, 2018, and was ordered to pay $325,342 in restitution and penalties. Blue Guru, LLC, was also subject to a default judgment on May 1, 2018, requiring it to pay over $6.07 million in restitution, disgorgement, and penalties.
In a related criminal case, Carter pleaded guilty to wire fraud on August 27, 2019, and is scheduled to be sentenced on February 13, 2020. (United States v. Carter, Case No. 1:18-cr-00154, N.D. Ill.). The CFTC cautions investors that recovery of funds is not guaranteed, as wrongdoers may lack sufficient assets.
The CFTC collaborated with the U.S. Attorney’s Office for the Northern District of Illinois and the Federal Bureau of Investigation during the investigation.
Source: CFTC.gov
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