The US Commodity Futures Trading Commission has announced that on 4 March 2009 the federal district court in Knoxville, Tennessee, issued a court order freezing the assets of Dennis R.
The US Commodity Futures Trading Commission has announced that on 4 March 2009 the federal district court in Knoxville, Tennessee, issued a court order freezing the assets of Dennis R. Bolze of Gatlinburg, Tennessee, and his Las Vegas-based company, Centurion Asset Management.
The asset freeze order was entered a day after the CFTC filed a complaint charging them with fraudulently soliciting commodity pool participants, misappropriating participants’ funds, and issuing false statements to participants in a USD20m fraud involving at least 100 participants in the US and Europe in a six-year-old scheme.
The CFTC complaint, filed in the US District Court for the Eastern District of Tennessee on 3 March 2009, also names Advanced Traded Services, another firm operated by Bolze, as a relief defendant because ATS received funds as a result of defendants’ fraudulent conduct and has no legitimate entitlement to those funds.
‘Bolze engaged in an international fraud claiming victims from both the US and Europe. In today’s globalized markets fraudsters no longer respect national boundaries. This is the reason the CFTC has engaged in a concerted effort to work cooperatively with our fellow regulators worldwide,’ says CFTC acting director of enforcement Stephen J. Obie.
The CFTC complaint alleges that from at least spring 2002 through the present, the defendants misappropriated pool participant funds for their own benefit and operated the commodity pool as a Ponzi scheme, using newly received participant funds to pay purported profits and withdrawals to other participants.
Defendants allegedly misrepresented to prospective pool participants that Bolze’s trading generated annual profits of between from 15 and 20 per cent and issued false account statements to give credibility to these misrepresentations.
According to the complaint, despite accepting over USD20m, the defendants’ actual commodity futures trading accounts never exceeded USD250,000 in equity, and Bolze’s trading during the relevant time resulted in approximately USD800,000 of trading losses.
According to the CFTC complaint, Bolze also failed to disclose to prospective pool participants that he plead guilty in 2001 to four counts of failing to file sales tax returns and failing to pay sales tax, resulting in a six-year prison sentence. The prison sentence was ultimately suspended, and Bolze was placed on supervised probation and fined.
The CFTC is seeking permanent injunctive relief, return of funds to defrauded participants, repayment of ill-gotten gains, civil penalties, and other equitable relief.
The CFTC is also seeking an order requiring ATS, the relief defendant, to disgorge funds up to the amount it received as a result of defendants’ fraudulent conduct.
