Scott Allensworth, of Newhall, California, along with Robert J. Fusco of Henderson, Nevada, and David Weddle of Prospect, Kentucky, have been slapped with a default judgment and permanent injunction following a four-year CFTC investigation into fraudulent commodity pool trading schemes. The U.S. District Court for the Central District of California found the trio defrauded as many as 76 victims out of nearly $3 million.
According to the CFTC, Allensworth, operating under the names Capital Growth Group Associates and Cobra Development Group LLP, along with his company E-Slate, Inc. (d/b/a Cobra Development Group LLP), Fusco, and Weddle fraudulently solicited investors, many of whom were existing tax and retirement-planning clients. The defendants exploited the trust and sensitive financial information of these victims.
The schemes involved misappropriation of funds and the fabrication of trading statements to cover up their actions. Judge Consuelo B. Marshall’s order, issued recently, demands significant financial penalties and bans the defendants from future commodity trading and registration.
Allensworth, E-Slate, and Fusco are jointly responsible for $268,000 in restitution and an $804,000 civil penalty. Allensworth, E-Slate, and Weddle are jointly liable for $2,527,874.44 in restitution and a staggering $7,583,623.32 civil penalty. The complaint initiating the case was filed on October 2, 2017.
The CFTC warns that victims may not recover all lost funds, as the defendants may lack sufficient assets. The agency continues to pursue accountability for those who violate commodity trading laws. The CFTC collaborated with the U.S. Securities and Exchange Commission, the U.S. Attorney’s Office, U.S. Marshals, and the Henderson, Nevada Police Department on this case.
Customers are urged to check the registration status and disciplinary history of firms before investing, and to report suspicious activity to the CFTC via its toll-free hotline or online complaint system.
Source: CFTC.gov
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