CFTC charges Tennessee and Kentucky fraudsters for over $1m in futures trading pool fraud

The U.S. Commodity Futures Trading Commission (CFTC) today announced that Chief Judge Kevin H. Sharp of the U.S. District Court for the Middle District of Tennessee issued an emergency Order freezing and preserving any remaining pool participant assets under the control of Maverick Asset Management, LLC, Rodney Scott Phelps, and Jason T. Castenir (Defendants) and another company that they control, Maverick Investment Holdings, LLC. The Order, entered under seal on August 25, 2015, also prohibits the Defendants from destroying books and records and grants the CFTC immediate access to those records.

The Order arises out of a civil enforcement Complaint filed under seal by the CFTC on August 25, 2015, charging the Defendants with fraudulently soliciting at least $1.2 million from members of the public to trade commodity futures in a pool, misappropriating more than $800,000 of pool participants’ funds for their personal use, and misrepresenting the profitability of their trading. In addition to fraud, the Complaint charges the Defendants with operating a commodity pool without being registered with the CFTC, as required.

The Complaint further alleges that the Defendants prepared and distributed to pool participants false account statements that altered genuine statements the Defendants received from their futures broker, and that showed false profits, while, at the same time, the Defendants’ futures trading was consistently unprofitable.

In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, the payment of monetary penalties, permanent registration and trading bans, and a permanent injunction from future violations of federal commodities laws, as charged.

The CFTC appreciates the cooperation of the U.S. Attorney’s Office for the Middle District of Tennessee.

CFTC Division Enforcement staff members responsible for this case are Glenn Chernigoff, Alison Wilson, Michael Loconte, Erica Bodin, Rick Glaser, and former Division staff member Stephen Barrows.

To view the release from the CFTC, click here.

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