Washington, D.C. — The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Southern District of Florida against Damian Castilla and his companies, DCAST Capital Investments LLC and Five Traders LLC, all of Miami, Florida, alleging that from January 2014 through the present, Castilla and his companies defrauded at least 50 pool participants of approximately $3.4 million through commodity pools that purported to trade commodity futures.
The CFTC seeks restitution, monetary penalties, disgorgement, registration and trading bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
Case Background
According to the complaint, the defendants made various material misrepresentations to solicit pool participants, including that they earned significant profits trading futures for pool participants. The defendants’ limited futures trading was not profitable, and instead of trading as promised, the defendants misappropriated the vast majority of pool participant funds. They used pool participant funds for car payments, home remodeling, lawn services, clothing, dining, and other personal expenses. The complaint also states that they continued their fraud by issuing false account statements that showed profitable trading in nonexistent trading accounts and by using a portion of the funds obtained from pool participants to pay fake profits to earlier pool participants.
The CFTC cautions victims that restitution orders may not result in the recovery of 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 Division of Enforcement staff members responsible for this matter are Nicholas Sloey, Elsie Robinson, Thomas Simek, Christopher Reed, and Charles Marvine.
CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud involving individuals and firms, often unregistered, offering investments in commodity pools.
The CFTC also strongly urges the public to verify a company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that entity. A company’s registration status can be found using NFA BASIC.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.
Source: CFTC
