Shipkevich Bitcoin and ICO Attorney
Felix Shipkevich October 5, 2011

The CFTC has obtained a court order requiring Perry Jay Griggs, Rachelle Griggs, and Aloha Trading Company to jointly and severally pay a $2.1 million in civil monetary penalty in connection with a commodity futures Ponzi scheme.

The order finds that in October 2003, Perry Griggs began serving a prison sentence at Nellis Air Force Based in Las Vegas for a previous Ponzi scheme. Rachelle Griggs moved to Las Vegas around the same time. Soon after arriving, the Griggs began soliciting funds to invest in commodity futures from Nellis inmates, their families, and members of the general public. They told potential investors that Perry was a multimillionaire with extensive commodity futures trading experience, neither of which was true. The Griggs also failed to disclose the risks of trading, instead guaranteeing profits and encouraging participants to refinance mortgages and liquidate savings. In this manner, the defendants were able to solicit $3 million.

In 2005, the Griggs formed Aloha Trading Company and opened a trading account on behalf of the company. A fraction of the funds solicited were actually invested in commodity futures trading accounts, and suffered staggering losses. Approximately $1.1 million was used to make Ponzi payments to cover up the trading losses. The remaining million was misappropriated by the Griggs for personal use, including payments for luxury car leases, the rental of a home in Hawaii, the purchase of jewelry, and the chartering of a private jet.

In August, Perry Griggs was sentenced to 87 months imprisonment, and Rachelle was sentenced to 48 months imprisonment for related criminal charges. They have also been ordered to pay $2 million each to pool participants.

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

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