Financial and Investment Fraud

January 24, 2023

A former energy company executive accused of defrauding investors of more than $15 million and misappropriating investor funds has been sentenced to 5 years in prison after pleading guilty to wire fraud.  While serving as the executive chairman and managing partner of Citadel Energy, which supposedly helped oil and gas companies with fluid management, Joey Stanton Dodson made false and misleading representations and omissions to investors concerning the intended use of their funds and his own compensation.  After obtaining over $15.6 million from over 50 investors, Dodson misappropriated $1.3 million into his own accounts, and used some of it to repay investors of unrelated entities.  DOJ

January 23, 2023

Charlie Abujudeh of California has been ordered to pay over $5 million for his role in defrauding retail investors through a microcap fraud scheme.  Abujudeh and associates allegedly made misleading statements during high pressure sales calls and email promotions to urge investors to invest in Odyssey Group International, Inc., Scepter Holdings, Inc., and CannaPharmaRx, Inc., then gave hundreds of thousands of investor funds to a contact within Odyssey.  SEC

January 19, 2023

The SEC has awarded approximately $18 million to a trio of whistleblowers whose information contributed to a successful enforcement action.  The first whistleblower’s detailed and significant information also led the agency to open an investigation and saved considerable staff time and resources.  SEC

January 13, 2023

The SEC has awarded more than $5 million to a whistleblower who first reported internally, and whose subsequent tip to the agency helped shape its investigation.  Based on the whistleblower’s information, agency staff were able to identify witnesses and effectively draft document and information requests.  SEC

January 11, 2023

A man accused of defrauding ten pension funds out of $43 million has been ordered to pay over $10.2 million in disgorgement, interest, and penalties.  Jason Sugarman, his partner Jason Galanis, and six other co-conspirators had acquired control of two investment advisors with the intent to use their clients’ funds to purchase Native American tribal bonds.  Instead, the group misappropriated the funds and used them to acquire a foreign insurance company and the second investment advisor.  SEC

December 21, 2022

Precious metals firm Monex Deposit Company, together with related entities and individual owners, have been ordered to pay a civil penalty of $5 million, and customer restitution of $33 million, to resolve claims arising from the defendants’ operation of a retail over-the-counter trading platform, known as “Atlas,” which allowed customers to speculate on precious metals price movements, with Monex acting as the counterparty to every transaction. While the defendants claimed in marketing that leveraged trading of precious metals was highly profitable, in fact, the majority of the trades resulted in losses for customers.  CFTC

December 20, 2022

Futures commission merchant CHS Hedging LLC will pay civil penalty of $6.5 million to resolve claims that it failed to implement an adequate AML program and failed to implement risk-based limits concerning trading in an account controlled by one of its customers that owned and controlled a ranching company and other related businesses.  The customer engaged in speculative trading that was inconsistent with its financial resources and hedging needs, and, over the course of four years, made net margin payments of more than $147 million to CHS Hedging.  The government alleged that the company did not adequately investigate the source of the customer’s funds or report the transactions as suspicious.  CFTC