Abad and companies to pay over USD860,000 to settle commodity pool fraud action
The US Commodity Futures Trading Commission (CFTC) has obtained more than USD860,000 in restitution and civil monetary penalties in a federal judgment against defendants Paul Abad of Orange County California, and his companies, Thirteen Thirty-Two, and Thirteen Thirty-Two, dba MRTS Asset Management.
The consent order requires the defendants jointly and severally to pay USD485,845 in restitution and a joint and several USD375,000 civil monetary penalty. The order also permanently bans the defendants from engaging in any commodity-related activity, including trading and registering with the CFTC.
The consent order stems from a CFTC complaint filed on December 1, 2008, charging the defendants with misappropriating customer funds and concealing trading losses in connection with operating a fraudulent commodity trading pool. The defendants allegedly solicited at least USD400,000 from the general public to trade commodity futures contracts, sustained approximately USD122,000 in trading losses, returned some funds to pool participants and misappropriated approximately USD230,000 of customer funds. The defendants also were charged with routinely sending false statements to pool participants reflecting profitable trading returns.
In a related criminal action, the Orange County District Attorney’s Office filed a criminal complaint against Abad in Orange County Superior Court, charging him with 25 felony counts under California law. The criminal complaint included charges involving false account statements, misappropriation and the use of a scheme to defraud. On November 3, 2010, Abad pleaded guilty to all counts and was sentenced to five years, four months in California state prison. The court also ordered Abad to pay criminal restitution of more than USD600,000.
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