CFTC Charges Kentucky Man in Multi-Million Dollar Fraud Scheme

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CFTC

CFTC Charges Kentucky Man in Multi-Million Dollar Fraud Scheme

June 3, 2020
CFTC - FraudWashington, D.C. — The Commodity Futures Trading Commission today announced the filing of a civil enforcement action in the Eastern District of Kentucky against defendant William S. Evans III (d/b/a Turning Point Investments) of Harrodsburg, Kentucky, charging him with fraud in connection with soliciting clients to trade S&P commodity futures contracts and options in a commodity pool while failing to register with the CFTC. The Commission’s action also names Evans’ wife, Frances Evans, as a relief defendant in possession of funds from Evans’ alleged illegal activity. On May 29, 2020, U.S. District Court Judge Claria Horn Boom signed a statutory restraining order freezing the Evanses’ assets and prohibiting the destruction or concealment of their books and records.

The CFTC complaint alleges that since at least September 2018, Evans accepted at least $10 million from clients of which he misappropriated at least $8.4 million. Evans allegedly paid some clients with non-existent profits in the manner of a Ponzi scheme while diverting other funds for his personal use. Although Evans promised participants that they would enjoy double-digit profits, the transactions he engaged in resulted in losses he failed to disclose. The complaint further alleges that Evans acted in a capacity requiring him to register with the CFTC as a commodity pool operator but failed to do so.

“As the allegations in this case show, the CFTC will work vigorously to root out fraud from our markets,” said CFTC Director of Enforcement James McDonald. “Where necessary and appropriate, the Commission will move swiftly to preserve assets for potential victims, including through statutory restraining orders that freeze assets that could be used to compensate victims.”

In its continuing litigation, the CFTC seeks restitution to defrauded investors, disgorgement of ill-gotten gains, civil monetary penalties, and the imposition of a permanent injunction against further violations of the Commodity Exchange Act, as charged, as well as permanent trading and registration bans.

The Division of Enforcement staff members responsible for this case are Candice Haan, Heather Dasso, David Terrell, Scott R. Williamson, and Robert T. Howell.

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