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Ponzi scheme

CFTC charges California men with multi-million dollar Ponzi scheme

The US Commodity Futures Trading Commission has charged Ruben Gonzalez and Jose C. Naranjo of California and their company, New Golden Investment Group, with fraud and misappropriation in connection with a multi-million dollar Ponzi scheme.

The CFTC obtained an emergency order from Judge Percy Anderson of the US District Court for the Central District of California on 20 May 2010, the same day the complaint was filed.

The order freezes the defendants’ assets and prohibits defendants from destroying documents or denying CFTC access to their books and records.

The CFTC’s complaint alleges that since at least August 2008, Gonzalez, Naranjo and New Golden fraudulently solicited and accepted approximately USD3.65m from at least 165 members of the Los Angeles-area Spanish speaking community for various investments, including commodity futures trading. The defendants falsely claimed to customers that they would double their money within a year in oil, gold, silver and other commodities.

According to the complaint, Gonzalez, Naranjo and New Golden falsely presented New Golden as a successful trading company by displaying trading software on New Golden’s office computers to make it appear to customers and prospective customers that New Golden was engaged in electronic commodity futures trading.

In reality, the complaint alleges, New Golden did not trade commodity futures for customers and did not make any of their advertised profits. Instead, Gonzalez and Naranjo allegedly ran a Ponzi scheme using new investor money to pay purported profits to existing investors.

The complaint also charges Gonzalez and Naranjo with misappropriating investor funds by transferring hundreds of thousands of dollars from New Golden’s business account to their personal accounts. They then used investor funds to purchase a Mercedes-Benz, airline tickets, various other retail items and to make payments on a home, according to the complaint.

The CFTC’s complaint seeks orders requiring the defendants to provide the CFTC with continuing access to books and records and to make an accounting with information necessary to determine the amounts received from and paid to New Golden investors. The CFTC also requests that the court issue orders of preliminary and permanent injunction against the defendants and order a return of alleged ill-gotten gains, repayments to defrauded customers and monetary penalties.

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