Scott M. Ross, formerly of Gilberts, Illinois, has been ordered to pay $5,402,818.89 in restitution and a $1.3 million civil penalty for perpetrating a fraudulent investment scheme, the U.S. Commodity Futures Trading Commission (CFTC) announced February 13, 2015. The order, issued by Judge James B. Zagel of the U.S. District Court for the Northern District of Illinois, stems from a 2009 CFTC complaint alleging violations of the Commodity Exchange Act.
Ross, along with his companies Maize Capital Management, LLC and Maize Asset Management, LLC, operated the “Maize Fund,” a pooled foreign exchange account. The CFTC alleged Ross and his companies engaged in extensive fraud by making false statements to potential investors, issuing fabricated account statements showing profits when the fund was not profitable, and mishandling customer funds. They also failed to register with the CFTC as a Commodity Pool Operator.
The court found that Ross and his companies were “unquestionably the cause of customers’ losses,” stating that “every dollar in the Fund was both obtained and retained through fraud.” Judge Zagel determined the violations of the Commodity Exchange Act were severe enough to warrant a substantial penalty.
Currently, Ross is incarcerated in federal prison for his involvement in two other separate fraudulent investment scams. The CFTC cautions that restitution orders do not guarantee victims will recover their lost funds, as wrongdoers may lack sufficient assets. The CFTC stated it will continue to pursue legal action against fraudulent actors and protect commodity trading customers.
Joseph Konizeski, Elizabeth Pendleton, Michael Tallarico, William Janulis, Scott Williamson, Rosemary Hollinger, and Richard Wagner of the CFTC’s Division of Enforcement were responsible for the case.
Source: CFTC.gov
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