The US Commodity Futures Trading Commission has announced that on 1 April 2009, a federal court judge in Knoxville, Tennessee issued a preliminary injunction against defendant Centurion
The US Commodity Futures Trading Commission has announced that on 1 April 2009, a federal court judge in Knoxville, Tennessee issued a preliminary injunction against defendant Centurion Asset Management and relief defendant Advanced Trading Services, both located in Las Vegas, Nevada.
Judge Thomas A. Varlan issued the order that freezes the assets of Centurion and ATS and prohibits Centurion from further violations of the Commodity Exchange Act, as charged. The court determined that the preliminary injunction was necessary to protect the public from further loss and damage and to enable the CFTC to fulfil its statutory duties.
The order stems from a CFTC complaint filed on 3 March 2009, charging Dennis Bolze of Gatlinburg, Tennessee, and Centurion, with fraud and misappropriation in operating a USD20m commodity pool Ponzi scheme.
As alleged, Bolze and Centurion operated a Ponzi scheme for at least six years that defrauded more than 100 investors and caused approximately USD20m in investor losses. ATS was charged as a relief defendant for receiving funds from defendants to which it was not entitled.
Bolze and Centurion told investors that they were pooling and investing customer money in S&P 500 and NASDAQ 100 stock index commodity futures, but instead misappropriated most of the funds, according to the complaint.
On 12 March 2009, Bolze was arrested in Pennsylvania by federal authorities in connection with a related criminal complaint. However, Bolze was in the custody of the US Marshal’s Service at the time of the 31 March hearing. As a result, Judge Varlan’s preliminary injunctive order did not address the CFTC’s charges against him.
In the continuing litigation, the CFTC is seeking permanent injunctive relief, return of funds to defrauded participants, repayment of ill-gotten gains, civil penalties, and other equitable relief.
