The US Commodity Futures Trading Commission has filed an enforcement action charging Perry Jay Griggs, a convicted felon and current fugitive, and his wife, Rachelle Griggs, most recently from Las Vegas, and their company, Aloha Trading, with operating a multi-million dollar commodity futures Ponzi scheme from at least 2005 through 2009.
The CFTC’s lawsuit, filed on 28 October 2010, in the US District Court for the District of Hawaii, charges the defendants with initiating the fraudulent commodity pool scheme in or about 2005.
At the time, Perry Griggs was serving a federal prison sentence for wire fraud and money laundering in connection with an earlier Ponzi scheme in California. To raise funds for Aloha, Perry Griggs solicited investments from his fellow prisoners, while his wife solicited families of prisoners and other members of the general public. Because the prison where Perry Griggs was incarcerated housed many inmates from Hawaii, many of defendants’ victims resided in Hawaii.
The CFTC complaint alleges that the defendants claimed that Perry Griggs was a multi-millionaire expert in commodity futures trading and was in prison for tax evasion. According to the complaint, defendants guaranteed investors’ returns and convinced many investors to refinance their homes or liquidate their retirement accounts and invest the proceeds with the defendants.
Defendants, however, lost 83 per cent of investors’ money trading futures contracts, according to the complaint. Defendants also misappropriated approximately one-third of the USD3m they received from investors to pay for personal expenses, including luxury car leases, renting a home in Hawaii, purchasing jewelry and chartering a private jet, the complaint charges.
Perry Griggs was released from prison in 2009, and, in January 2010, both Perry and his wife disappeared from their halfway house residence in Las Vegas, in violation of the terms of Perry Griggs’ parole. A warrant for his arrest is outstanding.
In its continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of federal commodities laws.