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North Carolina man fined USD3.8m in anti-fraud action

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The US Commodity Futures Trading Commission has obtained more than USD3.8m in civil money penalties and equitable relief in court orders against Tyrone “Cauzae” McCall and entities he controlled, McCall Business Group and MBG Global, both of Charlotte, North Carolina.

The sanctions resolve a CFTC enforcement action that charged them with solicitation fraud and misappropriation of investor funds in a commodity pool scheme.

The consent order of permanent injunction, entered on 23 April 2010 by US District Court Judge Frank D. Whitney of the Western District of North Carolina, requires McCall to pay USD782,625 in restitution and a USD1,027,000 civil monetary penalty.

The judgment order, also entered by Judge Whitney, requires MBG and MBG Global to pay, jointly and severally, USD1,027,000 in restitution and a USD1,027,000 civil monetary penalty. In addition, the defendants are permanently banned from engaging in any commodity-related activity.

The court’s order finds that between September 2003 and March 2008, McCall fraudulently solicited and accepted about USD1.2m from commodity pool participants by making false promises of high returns with no risk of loss of their principal.

McCall told prospective pool participants that he made money by keeping the difference between the promised (18 per cent or greater) return and the high (36 to 40 per cent) returns he generated from trading, but these statements were false, the orders find.

McCall, individually and as an agent of MBG and MBG Global, misappropriated pool participants’ funds by either using money deposited by new pool members to pay off other pool participants in a manner similar to a Ponzi scheme and/or using participants’ money for his personal use, the orders find.

The court’s order and judgment further find that, as part of this fraudulent scheme, McCall misrepresented his background and expertise by falsely stating that he had an illustrious career on Wall Street with a major investment bank to trick his victims into believing that he was a successful commodity trader. However, the orders find, McCall consistently lost money on his trading activities.

McCall is currently serving a five to seven and one-half year sentence at the Albemarle Correctional Facility in New London, North Carolina.

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