Craigslist ad scammer Lon Friedrichsen (aka Kummer aka Richardson) charged with solicitation fraud

sec fraud

The U.S. Commodity Futures Trading Commission (CFTC) has announced that it has filed a civil enforcement action in the U.S. District Court for the Southern District of New York, charging Lon Olen Friedrichsen of Alton, Iowa, with fraud and failing to register with the CFTC as a Commodity Trading Advisor, as required. Friedrichsen, as alleged, also solicited clients under the names of Lon Kummer and Lon Richardson, but omitted that these were false names.

The CFTC’s Complaint alleges that from at least December 16, 2014 through May 24, 2017, Friedrichsen fraudulently solicited clients in New York, New York and throughout the United States by making false statements in violation of the Commodity Exchange Act (CEA).

Specifically, the Complaint alleges that Friedrichsen solicited clients for his fraudulent scheme via Craigslist ads, telephone, and e-mail. In these solicitations, the CFTC alleges that Friedrichsen made numerous materially false and misleading statements concerning his trading successes, omitted material facts, guaranteed future trading profits, and prepared false trading statements.

Friedrichsen, as alleged, fraudulently induced clients to provide him with access to their personal commodity futures accounts held at Futures Commission Merchants. He then allegedly traded commodity futures in those accounts and advised clients to conceal his involvement in trading their accounts. Additionally, the CFTC alleges that Friedrichsen demanded 50% of any profits he generated and swiftly abandoned his clients after he lost money trading their accounts. According to the Complaint, Friedrichsen fraudulently solicited at least $396,735 from at least twelve clients, lost at least $160,382 of his clients’ money, and retained at least $45,369 in fees.

In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the CEA, as charged.

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