Charlotte, NC – Tyrone “Cauzae” McCall was ordered to pay over $1.8 million in penalties and restitution for running a commodity pool scheme that defrauded investors, the U.S. Commodity Futures Trading Commission (CFTC) announced May 4, 2010. McCall, along with his companies McCall Business Group, LLC (MBG) and MBG Global, LLC, were found to have engaged in solicitation fraud and misappropriation of investor funds.
U.S. District Court Judge Frank D. Whitney of the Western District of North Carolina entered a consent order on April 23, 2010, requiring McCall to pay $782,625 in restitution and a $1,027,000 civil monetary penalty. MBG and MBG Global were jointly assessed $1,027,000 in restitution and a matching $1,027,000 penalty. All defendants are permanently prohibited from participating in any commodity-related activity.
According to court findings, between September 2003 and March 2008, McCall falsely promised prospective investors high returns with no risk of losing their principal, soliciting approximately $1.2 million. He claimed to profit by pocketing the difference between promised returns (18 percent or higher) and actual trading returns (36 to 40 percent), a claim the court found to be false.
The CFTC alleged that McCall used a Ponzi scheme structure, utilizing funds from new investors to pay existing participants, and also diverted investor money for personal use. Further, McCall misrepresented his professional background, falsely claiming a successful career on Wall Street to gain investors’ trust, despite consistently losing money on trades.
Notably, McCall is currently incarcerated, serving a five to seven-and-a-half-year sentence at the Albemarle Correctional Facility in New London, North Carolina, unrelated to the CFTC case.
The case was led by CFTC staff members Tracey Wingate, Mary Kaminski, Michael Amakor, Timothy J. Mulreany, Alison Wilson, John Dunfee, Paul Hayeck and Joan Manley.
Source: CFTC.gov
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