January 27, 2017
CFTC Charges Florida Residents Anthony J. Klatch II and Lindsey Heim, along with their Company Assurance Capital Management, LLC, with Fraud and Misappropriation
Defendants allegedly defrauded more than $556,000 from at least 11 investors in multiple investment schemes
Klatch was charged with wire fraud in a related criminal action in the U.S. District Court for the Middle District of Florida
Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a federal enforcement action in the U.S. District Court for the Middle District of Florida against Anthony J. Klatch II (Klatch), Lindsey Heim, and their company Assurance Capital Management, LLC (ACM), all of Tampa, Florida, charging them with fraud, misappropriation, and the issuance of false statements in connection with a commodity pool they operated that traded commodity futures contracts and options on futures contracts.
According to the CFTC Complaint, Klatch is a recidivist offender that was previously subject to criminal and civil suits related to his financial schemes. In 2012, the U.S. District Court for the Southern District of Alabama sentenced Klatch to 60 months in prison on charges of securities fraud, wire fraud, money laundering, and conspiracy to defraud the United States in connection with a Ponzi scheme that Klatch orchestrated between 2007 and 2011. In a parallel litigation arising out of the same operative facts, the CFTC sought, and the U.S. District Court for the Southern District of New York (SDNY) entered, a final judgment ordering Klatch to pay approximately $12.9 million in restitution. In the SDNY case, the court also entered an injunction that permanently barred Klatch from, among other things: 1) trading futures and options; 2) trading futures and options on behalf of others; 3) having any futures and options traded on his behalf; 4) controlling or directing the trading for or on behalf of any other person or entity, in any account involving futures or options; and 5) soliciting, receiving, or accepting any funds from any person for the purpose of purchasing or selling any futures or options.
The Complaint alleges that Klatch, upon his release from prison in 2014, implemented a new series of investment schemes between April 2014 and December 2015. The first of these alleged schemes began in June 2015, when Klatch and Lindsey Heim established ACM for the purpose of fraudulently soliciting investors in a commodity pool. Per the Complaint, Klatch fraudulently marketed ACM to at least some prospective and actual pool participants by using the pseudonym “Larry J. Heim” to hide his true identity and past wrongdoing. To some ACM investors, Klatch provided his real identity, but misrepresented or failed to disclose the nature and extent of the permanent injunction entered against him in the CFTC’s prior civil action. According to the Complaint, Defendants also made material misrepresentations to investors, including providing false account statements showing successful trading by ACM. In total, investors in ACM’s pool contributed approximately $92,000, which was all lost through trading futures and options, or misappropriated for personal use by Klatch and Lindsey Heim, as alleged in the Complaint.
Additionally, in connection with an effort to solicit one prospective ACM investor, Klatch – misrepresenting himself as Larry J. Heim – offered to demonstrate successful trading in the prospective investor’s trading account as a means of attempting to convince him to make a $100,000 investment in ACM. Klatch’s trading in the prospective investor’s account caused at least $367,000 in losses over the course of three days.
In another alleged scheme, Klatch convinced an individual to provide $50,000 to an entity within Klatch’s control for the purpose of trading futures and options. In soliciting this individual, Klatch misrepresented or failed to disclose the nature and extent of the injunction entered against him in the CFTC’s prior civil action. All $50,000 was lost either through trading futures and options or through misappropriating the funds for personal use.
In yet another alleged scheme, Klatch made fraudulent representations and omissions in order to gain control over and direct trading in various individual trading accounts. For at least one of these individuals, Klatch’s caused trading losses of over $41,000 in his accounts and caused this individual to pay Klatch over $5,000 in fees related to commodity trading advice.
Related Criminal Action Filed
On January 26, 2017, the U.S. Attorney’s Office for the Middle District of Florida filed a related criminal action charging Klatch with wire fraud.
In its continued litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and preliminary and permanent injunctions from further violations of the federal commodities laws, as charged.
The CFTC thanks and acknowledges the assistance of the U.S. Attorney’s Office for the Middle District of Florida, the Federal Bureau of Investigation, and the Securities Commission of the Bahamas.
CFTC Division of Enforcement staff members responsible for this action are Rebecca Jelinek, Nicholas Sloey, Elsie Robinson, Peter Riggs, and Charles Marvine.
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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.
Last Updated: January 27, 2017