April 13, 2018
Federal Court in Michigan Enters Judgment against Jerry Stauffer for Commodity Pool Fraud
Washington, DC – The Commodity Futures Trading Commission (CFTC) today announced that Judge Paul L. Maloney of the U.S. District Court for the Western District of Michigan entered a Consent Order for Permanent Injunction (Consent Order) and an Order regarding a personal trading ban (Supplemental Order), which resolve charges against Defendant Jerry Stauffer, who resided in Traverse City, Michigan, for operating a fraudulent off-exchange foreign currency (forex) pool scheme.
The February 13, 2018 Consent Order stems from a CFTC Enforcement Complaint filed on February 25, 2015 (see CFTC Complaint and Press Release 7131-15). The Consent Order finds that Stauffer, individually and while acting as a commodity pool operator, fraudulently solicited, issued false statements and misappropriated pool participant funds in connection with the operation of a commodity pool from June 2010 to February 2015. According to the Consent Order, Stauffer guaranteed pool participants’ principal investment against risk of loss and further guaranteed profits on those investments. To perpetuate the fraud, Stauffer issued false account statements to pool participants that represented purported profits.
According to the Consent Order, Stauffer also misappropriated pool participant funds by using them for purposes other than trading, and he improperly operated the commodity pool in his own name. The Consent Order imposes a life-time ban on Stauffer from, among other things, soliciting or trading customer funds. The Supplemental Order issued by the Court on March 30, 2018 also banned Stauffer from engaging in any personal trading on markets regulated by the Commission for 15 years.
On February 25, 2015, Stauffer was indicted on criminal charges arising from the same fraudulent conduct that was the subject of the CFTC’s action. See United States v. Stauffer, 1:15-cr-34-01 (W.D. Mich.). Stauffer was found guilty of these charges and on June 14, 2016, was sentenced to ten years in prison and ordered to pay restitution in the amount of $845,679 to victims of his fraud. Given the criminal court’s award of full restitution in the criminal case, the Consent Order deferred to that restitution award.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Western District of Michigan, and the Federal Bureau of Investigation in this matter.
CFTC Division Enforcement staff members responsible for this case are Eugenia Vroustouris, Michelle Bougas, Erica Bodin, Kathleen Banar, and Rick Glaser.
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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.