Minnesota federal Chief Judge Michael J. Davis has incarcerated US Commodity Futures Trading Commission defendant Trevor G. Cook for violating the court’s asset freeze order against him by dissipating funds and failing to surrender more than USD35m in assets.
The court had ordered the asset freeze in connection with a CFTC civil anti-fraud action.
In a hearing that concluded on the same day, the court found Cook in civil contempt, and US Marshals escorted him from the courtroom to jail.
Chief Judge Davis ordered that Cook remain in jail until he has “purged the contempt” by, among other things, surrendering USD27m located in offshore accounts, a BMW and two Lexus automobiles, a submarine, a houseboat, a collection of expensive watches, a collection of Faberge eggs and USD670,000 in cash.
The CFTC filed a motion in December 2009 alleging that Cook had violated the court’s asset freeze in the CFTC’s case against. The CFTC obtained an emergency court order freezing Cook’s assets on the same day the CFTC filed its complaint.
The CFTC complaint charges Cook, nationally syndicated radio host Patrick J. "Pat" Kiley, and six entities they controlled with fraud and misappropriation in connection with running a massive scheme that defrauded over 900 US customers of more than USD190m.
As alleged, the defendants fraudulently solicited customers for the purported purpose of trading off-exchange foreign currency contracts in managed, segregated accounts. The accounts were allegedly placed with Crown Forex, a Swiss entity, in which Cook has been a majority owner since at least December 2008.
The CFTC also charges that Cook and the other defendants misappropriated millions of dollars of customer funds, using them to purchase property, develop a hotel and casino in Panama, buy seven luxury cars, a house boat and a submarine and to fund their frequent gambling.
In its continuing litigation in this matter, the CFTC seeks a return of ill-gotten gains, restitution to defrauded customers and civil monetary penalties.