A U.S. District Court in Florida has ordered Philip Milton, of Palm Beach
Gardens, and Palm Spring Gardens-based investment advisory firm Trade,
LLC to pay millions in restitution and penalties for operating a $28.4
Ponzi scheme. Four relief defendants, all Florida corporations, also were ordered to
pay millions in disgorgement.
The court’s order followed the 2010 filing of a
CFTC complaint against the defendants that charged them with fraudulently soliciting
approximately $28.4 million from hundreds of customers in a commodity
pool trading program. The complaint further alleged that the defendants
misappropriated at least $9.6 million of investor funds for their personal
use and to perpetuate the scheme.
According to the CFTC, the defendants falsely claimed to be successful
commodity futures traders in order to lure new investors into the scheme.
They also allegedly claimed the commodity pool had a profitable trading
record, which authorities have said was a lie.
“Despite taking in at least $28 million from investors, the defendants
were not successful traders and placed only $15 million of investors’
funds in trading accounts at the pool, which consistently lost money during
all but two months of its operation,” stated the
CFTC in a July 2010 press release.
Judge Daniel Hurley of the U.S. District Court for the Southern District
of Florida ordered Milton to pay $10.8 million in restitution. Trade,
LLC was ordered to pay more than $11.4 million in restitution and $28.4
million in civil monetary penalties. Relief Defendants BD, LLC; CMJ Capital,
LLC; Center Richmond, LLC; and TWTT, LLC; must disgorge $545,200; $2,826,981.37;
$1,253,862.62; and $100,000, respectively.
The SEC filed a similar complaint against Trade, LLC and its managing members
in June 2010. For additional information about the
SEC’s case against Phillip Milton and Trade, LLC., click here.