Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich July 4, 2011

The CFTC announced that it has filed charges against Louis Giddens, Anthony Dutton, and Michael Gomez for running a fraudulent off-exchange foreign currency (“forex”) scheme. The defendants allegedly took approximately $1.4 million from investors, and misappropriated almost all of it. Giddens and Dutton were by profession air traffic controllers. A federal judge has frozen Gomez’s assets and prohibited the destruction of all books and records.

Giddens and Dutton operated Currency Management Group LLC and Pinnacle Capital Partners LLC, respectively. According to the CFTC, between January and October 2010 Giddens and Dutton solicited funds from the general public, purportedly to use for OTC forex trading. However, the defendants transferred the funds to a third entity known as Pinnacle Trade Group LLC. From here, the funds were sent to a final location in Elyon LLC, a firm owned and operated by Gomez. Though some of the money was used to trade forex, the majority of funds were allegedly misappropriated by the defendants.

The complaint suggests that Giddens drew his inspiration from Botfly Inc., a forex Ponzi scheme he was invested with in 2008. Though the scheme was shut down in 2010, the scheme Giddens allegedly ran worked on a similar model. Giddens and Dutton guaranteed investors a 5-10% monthly return on their initial investment, even issuing a promissory note to that effect. Participants were provided with access to online accounts that gave grossly inflated account statements. Invested funds operated at a loss seven out of the nine months the commodity pool was in operation. The funds not invested were put to personal use, for example to fund car payments, hotel suites, and healthcare office technology.

Giddens and Dutton have been charged with misrepresentation, and Dutton and Gomez with misappropriation. The CFTC is seeking restitution, disgorgement of ill-gotten gains, a civil monetary penalty, and a permanent trading and registration ban for the defendants.

Read more about this CFTC enforcement action.
Creative Commons License photo credit: WTL photos

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