CFTC link: www.cftc.gov/PressRoom/PressReleases/pr7628-17 RELEASE: pr7628-17 October 11, 2017nCFTC Charges California Resident Scott Allensworth, His Company E-Slate, Inc., Nevada Resident Robert J. Fusco, and Kentucky Resident David Weddle with Fraud, Misappropriation, and Registration Violations Alleged Commodity Pool Fraud Took in More than $3.1 Million from at Least 72 Pool Participants Federal Court Enters Order Freezing Assets of Allensworth, Fusco, and E-Slate and Protecting Books and Recordsn Washington, DC u2013 The Commodity Futures Trading Commission (CFTC) today announced the filing of a Complaint on October 2, 2017, in the U.S. District Court for the Central District of California. The CFTC Complaint, filed under seal, charges Defendants Scott Allensworth (d/b/a Capital Growth Group Associates and Cobra Development Group LLP), of Newhall, California; his California company E-Slate, Inc. (d/b/a Cobra Development Group LLP); Robert J. Fusco, of Henderson, Nevada; and David Weddle, of Somerset, Kentucky, with fraudulent solicitation, providing fabricated statements to pool participants, and misappropriation in connection with investments in two separate commodity pools. The Complaint also charges Defendants with registration violations. On October 3, 2017, U.S. District Court Judge Consuelo Marshall signed a Statutory Restraining Order freezing the assets of Allensworth, Fusco, and E-Slate and prohibiting the destruction of their books and records. The district court scheduled a hearing for October 17, 2017 on the CFTCu2019s motion seeking a preliminary injunction against Allensworth, Fusco, and E-Slate. The Complaint alleges that, in connection with the DTG LLC pool, Allensworth and Fusco represented that Fusco was a successful futures trader when he was not. As alleged, Allensworth, E-Slate, and Fusco misappropriated all invested funds and issued false trading statements. They also allegedly concealed, and continue to conceal, their misappropriation of pool participant funds for personal use. Allensworth, working with Fusco, solicited 13 pool participants to contribute $246,500 to the DTG LLC pool, according to the Complaint. The Complaint further alleges that, since at least November 2015, Allensworth began working with Weddle to solicit investments in the JustInfo LLC pool. The Complaint alleges that Allensworth and Weddle used fake trading statements and touted false trading profits u2014 in some instances claiming profits in excess of 20% per month u2014 to entice prospective and existing pool participants to invest in the JustInfo LLC pool. Weddle, however, never generated a positive monthly return trading commodity futures and, by March 2017, had lost all pool participant funds that had been placed in trading accounts, according to the Complaint. In addition, Allensworth and Weddle allegedly made Ponzi payments to multiple pool participants and misappropriated pool funds to pay for personal expenses, including vacations, golf country club dues, dining, spa treatments, and college tuition for Weddleu2019s children. Allensworth solicited 59 of his clients to participate in the JustInfo LLC pool, and, collectively, Allensworth and Weddle solicited approximately $2.9 million for investment in the JustInfo LLC pool, the Complaint alleges. In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act and CFTC Regulations, as charged. The CFTC acknowledges and appreciates the assistance of the U.S. Securities and Exchange Commission, Los Angeles Regional Office, which filed a related action in the U.S. District Court for the Central District of California against Allensworth, Weddle, and JustInfo LLC. The CFTC also thanks the U.S. Attorneyu2019s Office and U.S. Marshals Service for the Central District of California and the City of Henderson, Nevada Police Department, for their assistance.
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