The following is a Press Release from the Commodity Futures Trading Commission (CFTC) announcing that a Federal Court has ordered Marvin W. Courson III and Christopher A. Kertatos to pay over $1.6 million in fines and penalties as part of a precious metals fraud case. The $1.6 penalty includes over $700,000 in restitution payments.
The Commodity Futures Trading Commission today announced the U.S. District Court for the Middle District of Florida entered consent orders on March 1 for permanent injunction, monetary sanctions, and equitable relief against Marvin W. Courson III (Courson) and Christopher A. Kertatos(Kertatos). Both Courson and Kertatos reside in Florida.
Previously, the U.S. District Court for the Middle District of Florida had entered an order of judgment against two other parties to the suit, The Alista Group, LLC(Alista) of Orlando, Florida, and Luis M. Pineda Palacios, a/k/a Luis Pineda of Orlando, Florida. [See CFTC Press Release No. 8379-21]
The court imposed fines and penalties totaling more than $1.6 million, that include a $560,152.60 civil monetary penalty as well as separate customer restitution of $560,152.60 on Courson, and a $274,988 civil monetary penalty as well as separate customer restitution of $274,988 on Kertatos. The orders also impose permanent trading and registration bans and a permanent injunction prohibiting the defendants from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The orders resolve the CFTC’s enforcement case filed on July 16, 2020. [See CFTC Press Release No. 8204-20]
According to the orders, from July 2016 through approximately January 2018, Courson and Kertatos defrauded customers intending to engage in illegal, off-exchange retail commodity transactions involving precious metals by misappropriating their funds to speculate in precious metals for Alista’s own account; paid Alista’s business expenses; and made Ponzi-style payments to customers who attempted to cash out some of their purported holdings. At all times during Alista’s operation, Courson was in control of its various bank accounts, business operations, and hiring decisions.
In addition, Kertatos individually defrauded some of Alista’s customers by using individual and/or corporate bank accounts under his personal control to accept Alista customer funds. He then misappropriated those funds to pay for personal and other expenses unrelated to leveraged precious metals transactions on behalf of Alista’s customers.
The CFTC cautions that orders requiring repayment of funds to victims may not result in the recovery of any money lost because the wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure the wrongdoers are held accountable.
The CFTC thanks the U.S. Secret Service, the Florida Office of Financial Regulation, and the Lee County (Florida) Sheriff’s Office for their assistance in this matter.
Division of Enforcement staff members responsible for this action are Alan Edelman, Michelle Bougas, Erica Bodin, Alison B. Wilson and Rick Glaser.