December 18, 2013

Federal Court in Florida Orders More than $8 Million in Sanctions against Defendants Philip Leon and Paul Rangel for Commodity Pool Fraud and Misappropriation

In a Parallel Criminal Action, Leon Pleaded Guilty to Mail and Wire Fraud

Washington, DC — The U.S. Commodity Futures Trading Commission (CFTC) obtained federal court Orders requiring Defendants Philip Leon, of Altamonte Springs, Florida, to pay a $4 million civil monetary penalty and $1,598,343 in disgorgement and Paul Rangel, of Apopka, Florida, to pay a $1.7 million civil monetary penalty and $819,781 in disgorgement to settle CFTC charges related to a fraudulent commodity pool scheme. The consent Orders of permanent injunction, both entered on December 17, 2013 by Judge Gregory A. Presnell of the U.S. District Court for the Middle District of Florida, also impose permanent trading and registration bans against Leon and Rangel and prohibit them from violating provisions of the Commodity Exchange Act and a CFTC Regulation, as charged.

The Orders stem from a CFTC Complaint filed on July 16, 2012 against Leon and Rangel, as well as Defendants John G. Wilkins and their company Altamont Global Partners LLC (see CFTC Press Release 6315-12).

The Orders find that, from approximately March 2009 to at least June 22, 2012, Leon and Rangel operated a fraudulent scheme that solicited at least $18 million from approximately 241 commodity pool participants to trade, among other things, commodity futures contracts, options on futures, and off-exchange foreign currency contracts. The Orders further find that Leon and Rangel misappropriated a combined total of more than $2.4 million of pool participants’ funds and issued false statements to pool participants regarding the profitability and value of their accounts. Specifically, Leon misappropriated nearly $1.6 million and Rangel nearly $819,000 of pool participants’ funds as “loans” and “advances” from the commodity pools, designed to disguise their misappropriation, the Orders find.

In a related criminal action, on November 6, 2013, Leon pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud (see United States v. Leon, No. 13-cr-249 (M.D. Fla. Oct. 2, 2013)). Leon has not yet been sentenced.

The CFTC’s litigation continues against Altamont Global Partners and Wilkins.

The CFTC thanks the National Futures Association for its assistance.

CFTC Division of Enforcement staff members responsible for this case are Rachel Hayes, Peter Riggs, Stephen Turley, Charles Marvine, Rick Glaser, and Richard Wagner.

Media Contact
Dennis Holden
202-418-5088
 

Last Updated: December 18, 2013