A default judgment and permanent injunction have been issued against Scott Allensworth, Robert J. Fusco, and David Weddle for operating fraudulent commodity pool trading schemes, the Commodity Futures Trading Commission (CFTC) announced. The schemes, spanning over four years, victimized approximately 76 individuals and resulted in losses totaling nearly $3 million.
Allensworth, operating through his companies Capital Growth Group Associates, Cobra Development Group LLP, and E-Slate, Inc., along with Fusco and Weddle, allegedly targeted existing tax and retirement-planning clients, exploiting their trust and financial information. The CFTC found that the defendants fraudulently solicited investments, misappropriated funds, and fabricated trading statements to conceal their misconduct.
Judge Consuelo B. Marshall of the U.S. District Court for the Central District of California issued the order. Allensworth, E-Slate, and Fusco were jointly ordered to pay $268,000 in restitution and a civil penalty of $804,000. Additionally, Allensworth, E-Slate, and Weddle were jointly ordered to pay $2,527,874.44 in restitution and a civil penalty of $7,583,623.32. The order also includes permanent bans on trading and registration, prohibiting further violations of the Commodity Exchange Act and CFTC Regulations. The complaint initiating the case was filed on October 2, 2017.
The CFTC cautioned that victims may not fully recover their losses, as the defendants may lack sufficient assets. The agency stated its commitment to pursuing accountability for those who defraud commodity pool participants.
The CFTC acknowledged assistance from the U.S. Securities and Exchange Commission Los Angeles Regional Office, the U.S. Attorney’s Office and U.S. Marshals Service for the Central District of California, and the City of Henderson, Nevada Police Department. The case was led by CFTC Division of Enforcement staff members Tom Simek, Jeff Le Riche, Elsie Robinson, James Humphrey, Joyce Brandt, Christopher Reed, and Charles Marvine.
The CFTC advises investors to be wary of unregistered investment promoters and to check the registration status and disciplinary history of firms through the National Futures Association (NFA) Basic website. Suspicious activities can be reported to the CFTC via its toll-free hotline or online complaint form.
Source: CFTC.gov
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