GRAND RAPIDS, MI – Ty Klotz and his wife, Monette Klotz, both of Mason, Michigan, have been charged with operating a Ponzi scheme through their companies, Aurifex Commodities Research Co. and Aurifex Research LLC, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on March 7, 2006.
The CFTC alleges that between April 2004 and February 2006, the Klotzes solicited participants for a “private hedge fund” under the name Aurifex Investments. Ty Klotz reportedly told potential investors that the fund generated monthly profits of 20 percent by investing in commodity futures, and falsely claimed deposits were insured by Lloyd’s of London.
The scheme allegedly collected nearly $150,000 from over 200 participants. However, the funds were deposited into a commodity futures trading account under Monette Klotz’s name and lost over $60,000 by January 2006. The Klotzes are accused of concealing these losses and misappropriating funds for personal use, including a down payment on a house and the purchase of multiple vehicles.
The CFTC’s complaint further states that the Klotzes violated federal regulations requiring registration of commodity pool operators. The agency is seeking permanent injunctive relief, restitution for defrauded customers, repayment of ill-gotten gains, and civil monetary penalties.
On March 7, 2006, the federal district court in Grand Rapids, Michigan issued a restraining order freezing the defendants’ assets. A hearing to determine if the freeze order should be continued was scheduled for March 17 before Chief Judge Robert Holmes Bell of the United States District Court for the Western District of Michigan. The extent of the impact on residents of the Lansing, Michigan area remains under investigation.
Anyone with information regarding this case is encouraged to contact the CFTC at 1-866-FON-CFTC or through their website.
Source: CFTC.gov
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