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Tuesday, October 22, 2019

Federal court freezes assets in fraud case

By Michael P. Tremoglie | Jul 13, 2012

HOUSTON (Legal Newsline) - A complaint filed in federal court for the Southern District of Texas by the U.S. Commodity Futures Trading Commission against TC Credit Service resulted in the freezing the defendants' assets the, CFTC announced Wednesday.

The complaint alleged that the defendants operated a commodity pool scheme that fraudulently solicited and accepted approximately $1.4 million from the public. Christopher Daley was owner and sole employee of TCCS.

The CFTC complaint states that from "at least January 2010 and continuing through at least November 2011, the defendants fraudulently solicited and accepted at least $1,427,688 from at least 55 members of the public to participate in a commodity pool to trade crude oil futures contracts. TCCS did not at any time during this period maintain any commodity accounts in its name. Daley's personal trading accounts sustained consistent net losses each month, according to the complaint."

Daley is accused of misappropriating most of the funds. He allegedly used at least $100,000 of pool participants' funds to pay for personal expenses and transferred approximately $195,000 of pool participant's funds to his own personal bank accounts.

The complaint further alleges that Daley made fraudulent misrepresentations and omissions of material fact, "including(1) misrepresenting that Daley's trading in crude oil futures contracts generated and would generate 20 percent monthly returns on deposits, (2)misrepresenting that the pool never had a losing month, (3) misrepresenting that the pool's value had increased 60 percent for the year as of March 2011,and (4) omitting that Daley misappropriated pool participants' funds, that the pool never maintained any commodity interest account in its own name, that Daley's personal futures trading accounts sustained consistent monthly losses, and that Daley was not properly registered as a Commodity Pool Operator with the CFTC.

The CFTC wants restitution for the customers, fines and permanent injunctions against further violations of federal commodities laws.

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