April 12, 2018
CFTC Obtains Default Judgment and Permanent Injunction against Arizona Resident Cory Williams and His Company, Williams Advisory Group, LLC, for Commodity Pool Fraud
Federal Court Orders Gilbert Resident Cory Williams and Williams Advisory Group, LLC to Pay More than $19.4 Million in Restitution and a Civil Monetary Penalty
Washington, DC –The Commodity Futures Trading Commission (CFTC) announced that Judge John J. Tuchi of the U.S. District Court for the District of Arizona entered an Order of Default Judgment and Permanent Injunction against Defendants Cory Williams of Gilbert, Arizona, and his company, Williams Advisory Group, LLC (WAG), in connection with a commodity pool fraud that victimized 40 pool participants, including Williams’ family, friends, neighbors, and members of his church and other related churches in and around Phoenix, Arizona.
The court’s Order requires Williams and WAG, jointly and severally, to pay restitution of $9,725,017 to defrauded participants and a civil monetary penalty of $9,725,017. The Order also imposes permanent trading and registration bans on the Defendants and prohibits them from violating provisions of the Commodity Exchange Act and CFTC Regulations, as charged.
The Order, entered on March 16, 2018, stems from a CFTC Complaint filed on May 3, 2017, that charged Williams and WAG with commodity futures fraud and Williams with commodity pool fraud and failure to register as a commodity pool operator (see CFTC Complaint and Press Release 7556-17).
The Order finds that, from at from at least April 2014 through December 2016, Williams fraudulently solicited and accepted more than $13 million from 40 individuals to trade E-Mini S&P 500 futures contracts, among other things, in a pooled fund. According to the Order, Williams used participants’ funds to trade significant volumes of futures contracts in his personal trading accounts and lost more than $8.3 million of participants’ funds, all while falsely representing to participants that he was profitably trading on their behalf.
The Order also finds that Williams used the remaining funds from participants to pay his personal expenses and to return approximately $3.4 million to certain participants as withdrawals of principal or as purported trading “profits” in furtherance of the Defendants’ fraudulent scheme. Further, the Order finds that Williams sent text messages to participants reporting fabricated trading profits.
In a related criminal action, the U.S. Attorney’s Office for the District of Arizona charged Williams by criminal information with one count of transactional money laundering. United States v. Williams, 2:17-cr-1279-DLR. Williams entered a guilty plea in the related criminal action on September 27, 2017, and he is scheduled to be sentenced on April 16, 2018.
The CFTC cautions that Orders requiring repayment of funds to victims may not result in the recovery of any 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.
CFTC Division of Enforcement staff members responsible for this case are Timothy J. Mulreany, Danielle Karst, Patricia Gomersall, Dmitriy Vilenskiy, Anthony Homer, Hillary Van Tassel, and Paul G. Hayeck.
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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.