Robert A. Christy of Milton, Georgia, and his company Crabapple Capital Group LLC are facing charges of forex fraud, misappropriation, and making false statements to the National Futures Association (NFA), following an emergency order issued by Judge Richard W. Story of the U.S. District Court for the Northern District of Georgia on April 19, 2012. The CFTC filed a federal court action against Christy and Crabapple, leading to the asset freeze and a prohibition against altering records. A hearing is scheduled for May 1, 2012, in Georgia.
The Commodity Futures Trading Commission (CFTC) alleges that from at least October 2008, Christy and Crabapple defrauded at least 20 investors who contributed over $1.3 million to a commodity pool trading foreign currency. Both Christy and Crabapple are registered with the CFTC and are members of the NFA.
According to the complaint, the defendants misrepresented Crabapple as a reputable and profitable investment firm with over $50 million in assets under management. However, the CFTC claims that investor funds were used for personal expenses – including travel, meals, and family payments – totaling at least $800,000. The defendants allegedly advertised a “conservative” forex investment strategy promising around eight percent annual returns with low risk.
Marketing materials falsely claimed average annual returns of 15 to 20 percent from 2006 to 2011, with consistent profitability. The CFTC alleges these returns were fabricated, as actual trading records demonstrate consistent losses during that period. Furthermore, the claim of $50 million in assets under management was allegedly false.
To conceal the fraud, the defendants are accused of distributing false monthly account statements showing profits even during months of trading losses. They also allegedly provided the NFA with falsified accounting records during a 2011 examination, falsely claiming that Crabapple did not operate trading pools or accept customer funds for forex trading, and that all funds were Christy’s personal investments. The CFTC continues to investigate.
Source: CFTC.gov
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