Commodity Futures Trading Commission (CFTC) ……
The Commodity Futures Trading Commission (CFTC) announced today that the U.S. District Court for the Middle District of Florida entered an order granting the CFTC’s motion for entry of default judgment against defendants The Alista Group, LLC of Orlando, Florida and other locations, and Luis M. Pineda Palacios, a/k/a Luis Pineda of Orlando, Florida. The order finds that the defendants failed to answer the CFTC’s complaint, which alleged that Alista and Pineda had engaged in precious metals fraud and illegal, off-exchange precious metals sales to retail customers.
The order requires Alista to pay $560,540.95 USD in restitution and a civil monetary penalty of $1,681,622.85. The order also requires Pineda to pay restitution in the amount of $77,500, and a civil monetary penalty of $370,484. In separate, concurrently issued orders, the court also permanently enjoined Alista and Pineda from engaging in conduct that violates the Commodity Exchange Act, from registering with the CFTC, and from trading in any CFTC-regulated markets.
The CFTC continues to engage in litigation with two remaining defendants as part of a 2020 enforcement action against Marvin W. Courson III and Christopher A. Kertatos.
Case Background
According to the complaint, from July 2016 through at least January 2018, Alista engaged in a scheme to defraud customers located throughout the U.S. in connection with precious metals transactions. These transactions constituted illegal, off-exchange retail commodity transactions. Notably, Alista’s leveraged precious metals transactions never resulted in the actual delivery of the full amount of metal purchased by its customers.
The complaint further alleges that, in connection with this activity, Alista defrauded these customers by misappropriating their funds to speculate in precious metals for Alista’s own account, pay Alista’s business expenses, and make Ponzi-style payments to customers who sought to cash out some of their purported holdings. In addition, Pineda individually defrauded at least some of Alista’s customers by using an individual bank account under his personal control to accept Alista customer funds and then misappropriate those funds to pay for personal and other expenses unrelated to leveraged precious metals transactions on behalf of Alista’s customers.
The CFTC cautions victims that restitution orders may not always result in the recovery of money lost, because wrongdoers may not have sufficient funds or assets. The CFTC will continue to fight vigorously for the protection of customers and to ensure 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.
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CFTC’s Precious Metals Customer Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Precious Metals Fraud Advisory, which alerts customers to precious metals fraud and lists simple ways to spot precious metals scams.
Customers can report suspicious activities or information, such as possible violations of commodity trading laws, to the CFTC Division of Enforcement via a Toll-Free Hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
