AUSTIN, TEXAS – Richard D. Theye of Austin, Texas, has been ordered to pay over $6.2 million in restitution and penalties for operating a multi-million dollar Ponzi scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced May 26, 2011. The judgment was entered by U.S. District Judge Sam Sparks of the U.S. District Court for the Western District of Texas.
The CFTC originally filed a complaint against Theye and his company, Micind Capital Management, Inc., on June 1, 2010, alleging fraud. The court order requires Theye to pay $5,700,587.02 in restitution to defrauded investors and a $560,000 civil monetary penalty. He is also permanently banned from engaging in any commodity-related activities and from registering with the CFTC.
According to the order, beginning in at least December 2005, Theye fraudulently solicited investments in two commodity pools, RYCO Group, LLC and First RYCO, LLC. He targeted members of the public, even encouraging them to liquidate retirement funds – 401(k)s, IRAs, and pension funds – to invest in the pools. Theye allegedly made false representations about the pools’ historical profits trading commodity futures during meetings at his church and in advertising materials.
The CFTC found that Theye misappropriated the majority of investors’ funds to maintain the Ponzi scheme, paying earlier investors with money from new investors. His commodity futures trading consistently resulted in losses, amounting to hundreds of thousands of dollars since 2006. He further deceived investors by issuing fictitious account statements showing fabricated profits.
In addition to the CFTC’s civil enforcement action, the U.S. Attorney for the Western District of Texas filed a 13-count criminal indictment against Theye on June 1, 2010. Theye pleaded guilty to nine counts on July 13, 2010, and was sentenced to 144 months at the Lompoc Federal Correctional Institution in Lompoc, California.
The CFTC acknowledged the assistance of the U.S. Attorney’s Office, the Federal Bureau of Investigation, the Texas State Securities Board, and the Receiver, Kelley Crawford of Scheef & Stone, L.L.P., in pursuing this case.
Source: CFTC.gov
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