Release: 4764-03
For Release: March 20, 2003

MICHIGAN MAN ORDERED TO PAY $6.3 MILLION TO CUSTOMERS DEFRAUDED IN COMMODITY FUTURES INTERNET SCAM

Federal Court Orders Defendants to Refund Investments to 900 Customers

WASHINGTON, D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today that Judge Paul V. Gadola of the U.S. District Court for the Eastern District of Michigan entered an order requiring Todd James Snively of Northville, Michigan, and two Michigan corporations, Commodity Consultants International, Inc. (CCI) and Futurewise Trading Group, Inc. (Futurewise), to pay restitution of more than $6 million to approximately 900 defrauded commodity futures investors.

The court’s order stems from an action the CFTC filed against Snively, CCI, and Futurewise on February 8, 2002 (see CFTC News Release 4606-02, February 11, 2002). The complaint alleged that the defendants solicited customers to trade commodity futures, touting low commissions and good service. Also, as alleged, customers were told they could trade for themselves on an internet trading platform, or place trades through CCI and Futurewise to be executed on exchanges.

However, according to the complaint, the defendants made no trades on behalf of the customers; instead, the defendants kept customers’ funds and sent them fictitious account statements over the internet that falsely reflected commodity futures trading activity to the customers. Based on these allegations, the complaint charged Snively and his companies with misappropriating customer funds, issuing false reports, and making material misrepresentations and omissions in promoting their businesses.

The defendants, who did not contest any of the allegations of the complaint, consented to the entry of the court’s order, which requires them to repay customers a total of $6,274,986, plus interest, and requires Snively to pay a contingent civil monetary penalty of $360,000, with all payments to be made under a ten-year payment plan. The order also:

• enjoins further violations of the sections of the Commodity Exchange Act charged in the complaint;
• prohibits the defendants from engaging in any customer-related commodity activity;
• prohibits any personal commodity trading; and
• designates victims of the fraud as third-party beneficiaries who will be able to seek enforcement of the court’s order, if necessary.

On March 11, 2002, the United States Attorney for the Eastern District of Michigan filed a civil forfeiture action, seizing approximately $4.6 million in funds frozen in the CFTC’s injunctive lawsuit. The court’s order of permanent injunction allows the defendants’ restitution obligation to be reduced by any amounts paid to defrauded customers in the civil forfeiture action.

The following CFTC Division of Enforcement staff were responsible for this case: Rosemary Hollinger, Scott R. Williamson, Robert J. Greenwald, Mark Bretscher, Donald Nash, and Joy McCormick.

Media Enforcement Contract

Rosemary Hollinger, Associate Director
Commodity Futures Trading Commission
Division of Enforcement
(312) 596-0520

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