Apple Valley, MN – November 24, 2009 – Minnesota residents Trevor G. Cook and Patrick Kiley are facing charges of fraud and misappropriation related to a massive foreign currency (forex) trading scheme, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC). The CFTC secured an emergency court order freezing assets belonging to Cook, Kiley, and their affiliated companies: Oxford Global Advisors, LLC (OGA), Oxford Global Partners, LLC (OGP), Universal Brokerage FX (UBFX), and Universal Brokerage FX Diversified (UBFXD).
The complaint, filed under seal on November 23, 2009, in the U.S. District Court for the District of Minnesota, alleges that the defendants defrauded hundreds of U.S. customers out of more than $190 million through the forex scheme, which operated since 2006. Chief Judge Michael Davis issued the order, which also prohibits the destruction of financial records and grants the CFTC access to those documents.
According to the CFTC, Cook and Kiley falsely claimed to have generated over 10 percent annual profits with no losses since 2003 to attract investors. They also misrepresented that customer funds were held in segregated accounts with Crown Forex, SA, a Swiss company majority-owned by Cook since December 2008. However, the CFTC alleges the defendants misappropriated these funds for personal use, including the purchase of property, development of a hotel and casino in Panama, luxury vehicles (seven in total), a houseboat, and even a submarine. The funds were also allegedly used to finance frequent gambling activities.
Despite the Swiss Financial Market Supervisory Authority (FINMA) placing Crown Forex into receivership in December 2008 and bankruptcy in May 2009, the defendants continued to solicit and accept funds from customers until July 2009. They allegedly provided customers with false account statements depicting profits of 10 to 12 percent annually to perpetuate the fraud. Cook resides in Apple Valley, Minnesota, while Kiley is based in Burnside, Minnesota. UBFX and UBFXD are located in Burnside, and OGA and OGP are based in Minneapolis.
The CFTC is seeking the return of illegally obtained gains, restitution for defrauded customers, and civil monetary penalties as part of its ongoing litigation. The agency received assistance in the case from FINMA, the U.S. Securities and Exchange Commission, and the U.S. Attorney’s Office in Minneapolis.
Source: CFTC.gov
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