Today’s Ponzi: CFTC Charges Florida And Virginia Residents With Operating A $28 Million Scheme

Phillip Milton of Palm Beach Gardens, Fla., Gregory Center of McLean, Va., William Center of Richmond, Va., and their company, Trade LLC, based in Palm Spring Gardens, Fla., have been charged by the Commodity Futures Trading Commission with operating a Ponzi scheme involving approximately $28 million in connection with the Trade commodity pool. 

As alleged, from at least May 2007 through July 2009, Milton, Gregory Center and William Center fraudulently solicited approximately $28 million from at least 900 persons to participate in a commodity pool to trade commodity futures and options, among other things. The complaint alleges that, in connection with operating the scheme, the defendants committed solicitation fraud and misappropriated pool funds. In addition, William Center is charged with issuing false pool account statements, and Trade, Milton and Gregory Center are charged with failing to register with the CFTC as commodity pool operators.
 
The government contends that: To induce new pool investors, the defendants claimed to be successful commodity futures traders and touted the pool as having a profitable trading record. 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. The defendants also misappropriated at least $9.6 million for their personal use and to continue the scam. As is typical of a Ponzi scheme, the defendants paid principal and purported profits to existing pool participants using funds from new investors.