April 29, 2015

Federal Court Orders North Carolina Resident James Harvey Mason to Pay a Civil Penalty and Restitution Totaling $5.5 Million for Commodity Pool Fraud

In a related criminal action involving the same conduct, Mason pleaded guilty in June 2014 and is awaiting sentencing

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge C. Graham Mullen of the U.S. District Court for the Western District of North Carolina entered a Consent Order against Defendant James Harvey Mason of Graham, North Carolina, imposing a $1.67 million civil monetary penalty and restitution of $3.88 million in connection with off-exchange foreign currency (forex) commodity pool fraud in violation of the Commodity Exchange Act (CEA). The Consent Order also permanently enjoins Mason from further violations of the CEA, as charged, and imposes permanent trading and registration bans on him. Mason has never been registered with the CFTC in any capacity.

The Court Order arises out of the CFTC enforcement Complaint filed on March 27, 2013 (see CFTC Complaint and Press Release 6549-13). The Consent Order finds that, commencing in at least July 2010, Mason fraudulently solicited, accepted, and pooled at least $5.3 million from approximately 500 participants. The Consent Order further finds that Mason pooled only a portion of the participant funds and placed them in forex trading accounts in his commodity pools’ names, in which he lost over $1.12 million trading and that he deposited the rest of the participant funds in various bank accounts, withdrawing funds as needed to make “Ponzi” payments to other participants, and misappropriating at least $779,000 of participant funds and using such funds for purposes other than for forex trading.

Related Criminal Action

In a criminal action in the U.S. District Court for the Western District of North Carolina involving the same conduct, Mason pleaded guilty in June 2014 to single counts of securities fraud conspiracy and filing a false tax return for tax year 2011, and is awaiting sentencing (see U.S. v. James Harvey Mason, No. 3:14-cr-122-FDW).

The CFTC cautions victims that restitution orders may not result in the recovery of money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable

The CFTC appreciates the assistance of the North Carolina Secretary of State Securities Division and the U.S. Attorney’s Office for the Western District of North Carolina in this matter.

CFTC Division of Enforcement staff members responsible for this case are Barry R. Blankfield, Jennifer E. Smiley, Heather Johnson, Patricia Gomersall, Joseph Konizeski, Scott Williamson, and Rosemary Hollinger.

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CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.

Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online. 

Media Contact
Dennis Holden
202-418-5088

Last Updated: April 29, 2015