Marco Island, FL & Southampton, PA – March 31, 2014 – Ward Onsa was ordered to pay nearly $6 million in penalties for perpetrating a Ponzi scheme through his company, New Century Investment Management LLC, according to a judgment entered by Judge Mary A. McLaughlin of the U.S. District Court for the Eastern District of Pennsylvania on March 20, 2014. The case, initially filed by the U.S. Commodity Futures Trading Commission (CFTC) on April 5, 2011, alleged solicitation fraud, misappropriation of funds, and the issuance of false account statements to investors in a commodity pool.
The court found that Onsa and New Century fraudulently obtained over $2.2 million from at least 12 investors who believed their funds would be used to trade commodity futures and options contracts through the New Century Hedge Fund Partners I, LP. Instead, the defendants misappropriated the funds, using them for personal expenses and to pay earlier investors with money from newer investors – a classic hallmark of a Ponzi scheme.
In addition to the $5.7 million civil monetary penalty, jointly assessed against Onsa and New Century, the court imposed permanent trading and registration bans, preventing them from violating anti-fraud provisions of the Commodity Exchange Act. The penalty is triple the amount of the defendants’ gains, reflecting the egregious nature of their conduct and its duration.
Notably, any payments made by Onsa towards the penalty will first be applied to satisfy a $3,135,132.22 restitution order stemming from a separate criminal case, U.S. v. Ward Onsa, in the Eastern District of New York. Onsa was sentenced to 78 months in federal prison on July 26, 2012, and ordered to pay restitution to 26 victims of various schemes, including those defrauded through New Century. He is currently incarcerated at the Federal Correctional Institution in Estill, South Carolina.
The CFTC acknowledged the assistance provided by the Office of the United States Attorney for the Eastern District of New York. The case was led by CFTC staff members Elizabeth Brennan, Philip Rix, Steven Ringer, Lenel Hickson, Jr., and Manal M. Sultan.
Source: CFTC.gov
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