They operated a fraudulent commodity pool soliciting $ 18 million from investors over three years
What’s the best time to pull off a forex scheme? – In the aftermath of the greatest financial crisis of modern times of course! That might be an answer in an interview with Philip Leon and Paul Rangel, because that’s precisely what they managed to do. The CFTC issued a press release informing the public that it has obtained a court order against perpetrators of a rather big commodity pool fraud.
According to the court order Philip Leon must pay $4 million civil monetary penalty and $1.6 million in disgorgement, while Paul Rangel is liable for $1.7 million in civil monetary penalty and $819,781 in disgorgement. The Defendants have orchestrated a commodity pool fraud and are permanently banned from trading and registration.
According to the court Leon and Rangel operated the scheme through their company Altamont Global Partners LLC from March 2009 until at least June 2012. During the period they have obtained at least $18 million from about 241 commodity pool participants and traded commodity futures, options and off-exchange forex contracts.
They have managed to misappropriate $2.4 million of their investors’ funds and have mislead investors to believe that there were gains realized in commodity pools ironically named The McKinley Fund LLC and The Matterhorn Fund LLC. We wonder whether the defendants are simply climbing aficionados or they just aimed to gain credibility with their “peak” performance.
According to the complaint filed on July 16th 2012 the value of Matterhorn was about $1 million while McKinley’s was about $2.2 million. In addition they have attempted to conceal their losses from the NFA by sending out false statements stating that funds were in fact performing well – as of the first quarter of 2012 they claimed commodity pools in question allegedly had $9.9 million and $6.5 million.
Leon misappropriated narly $1.6 million dollars and Rangel about $819,000 disguised as loans and advances. A criminal court action is still pending for Mr. Leon, he pleaded guilty on November 6th 2013.
For a link to the full press release visit CFTC’s website.