CFTC charges Altamont Global partners with fraud

Michael P. Tremoglie Jul. 27, 2012, 9:57am

WASHINGTON (Legal Newsline) - The U.S. Commodity Futures Trading Commission announced that on July 16 an emergency order freezing defendants' assets and protecting books and records was entered in the case against Altamont Global Partners of Longwood, Fla.

The order in federal court for the Middle District of Florida was for the assets of defendants Philip Leon of Altamonte Springs, Fla., Paul Rangel of Apopka, Fla., John Wilkins of Chuluota, Fla., and their company, AGP. The order also prohibits the defendants from destroying or altering books and records.

The order arises from a CFTC federal court enforcement action filed on July 16 charging the defendants with futures, foreign currency, options fraud and misappropriation. The CFTC complaint also charges the defendants with making false statements to the National Futures Association. AGP and Wilkins are registered with the CFTC and are NFA members.

The complaint alleges that since at least March 2009 until at least June 22, 2012, AGP solicited approximately $13 million from approximately 198 participants who invested in two investment pools operated by AGP: The McKinley Fund and The Matterhorn Fund. These pools traded futures, options, and off-exchange forex contracts, according to the complaint.

The defendants allegedly misappropriated more than $5.2 million of pool funds to pay personal and business travel and expenses and a loan from AGP to Leon. The misappropriation also "allegedly included the use of pool funds to pay "loans" and "advances" of approximately $1,419,000 to Leon, $615,000 to Rangel and $651,000 to Wilkins."

According to the complaint, "as of the quarter ending March 31, 2012, AGP issued quarterly statements to pool participants that, collectively, showed that the Matterhorn pool participants' interests were approximately $10 million, and the McKinley pool participants' interests were approximately $6.5 million. However, in actuality, as of March 31, 2012, the value of all assets held by Matterhorn was approximately $1 million and the value of all assets held by McKinley was approximately $2.2 million."

The defendants tried to conceal their crimes from the NFA by furnishing false statements in an attempt to hide the defendants' trading losses and misappropriation of pool funds, the CFTC says. False balance sheets were provided indicating that, as of March 31, Matterhorn had a purported net asset balance of $9.9 million and McKinley had a purported next asset balance of $6.5 million, but these were inflated figures, the CFTC says.

The CFTC seeks civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registration bans, and preliminary and permanent injunctions against further violations of the federal commodities laws, as charged.

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