A former Texas resident and his company are facing charges of commodity fraud after allegedly defrauding at least 70 people out of over $3.6 million. The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Northern District of Texas against Walter Dunning Larrick III, of Corpus Christi, and Cambridge Financial Advisors, LLC, a Texas limited liability company owned and controlled by Larrick.
The CFTC alleges that Larrick and Cambridge fraudulently induced investors to contribute to a purported commodity pool between November 2020 and January 2023. The complaint details a scheme where the defendants made false and misleading claims to attract investors, including assertions that Cambridge had a 20-year history of profitable returns, operated as a U.S.-based company with funds held in domestic bank accounts, and employed a hedging strategy guaranteeing profits regardless of market fluctuations.
According to the CFTC, Larrick and Cambridge promised a 15% commission on trading profits and unrestricted access to funds. However, instead of investing the $3,644,817.52 as represented, the defendants allegedly misappropriated the majority of the funds, transferring them to offshore bank accounts in Costa Rica. Remaining funds were reportedly used for Larrick’s personal expenses and to make Ponzi-like payments to earlier investors.
To conceal the misappropriation, the defendants allegedly created and distributed falsified account statements showing fabricated trading returns. When investors requested withdrawals, their requests were either ignored or deliberately delayed. The CFTC is seeking restitution, disgorgement of ill-gotten gains, civil monetary penalties, and permanent trading and registration bans against Larrick and Cambridge. They also request a permanent injunction to prevent further violations of the Commodity Exchange Act and CFTC regulations.
The CFTC acknowledged assistance from the Superintendencia General de Valores de Costa Rica (SUGEVAL) during the investigation. The case is being prosecuted by James H. Holl, III, Sarah Wastler, Brendan Forbes, Kevin Samuel, Erica Bodin, and Rick Glaser of the CFTC’s Division of Enforcement.
Source: CFTC.gov
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