CFTC Charges California Residents Frank J. Collins and Gerard Suite and Their Company, STA Opus NR LLC, with Fraud, Misappropriation, and Failing to Register with the CFTC
CFTC Alleges Defendants Fraudulently Solicited at Least $1.6 Million, while Misappropriating at Least $1.25 Million of Customer Funds
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court, Central District of California, charging Defendants Frank J. Collins of Garden Grove, California, and Gerard Suite of Irvine California (who is known by numerous aliases, including Rawle Gerard Suite, Jerry Suite, and Jerry Snead), and their Delaware limited liability company, STA Opus NR LLC (STA Opus), with fraudulently soliciting at least $1.6 million from at least 30 customers to operate a commodity pool and misappropriating approximately $1.25 million of customers’ funds for their own benefit.
The CFTC’s Complaint also charges Defendants with issuing false account statements to customers in order to conceal their fraud and alleges that STA Opus was acting as a Commodity Pool Operator (CPO) and Collins and Suite were acting as Associated Persons of the CPO, but Defendants were not registered with the CFTC as such.
Specifically, the Complaint alleges that, from at least January 2013 to the present, Collins and Suite, through their company, STA Opus, fraudulently solicited customers by falsely representing that STA Opus’ commodity pool had positive annual rates of return, when in fact, STA Opus’ three commodity futures trading accounts had negative returns, with Defendants losing virtually all of the funds they committed to trading. In addition, as part of the their scheme, Defendants allegedly requested that some customers send them “voided” personal checks, which provided Defendants with customers’ bank account numbers and bank routing information, allowing Defendants to withdraw funds directly from customers’ bank accounts.
The Complaint also alleges that Defendants failed to disclose to customers that prior sanctions were entered against Suite revoking his registration with the CFTC, enjoining him from violating the California Corporations Act, and ordering him and entities acting with him to pay $2.5 million in restitution and fines for conducting business as an unregistered investment advisor in California.
In its continuing litigation against the Defendants, the CFTC seeks full restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, permanent registration and trading bans, and a permanent injunction against violations of the federal commodities laws, as charged.
The CFTC’s Enforcement Division thanks and acknowledges the assistance of the Federal Bureau of Investigation (Orange County, California) and the U.S. Attorney’s Office for the Central District of California.
CFTC Division of Enforcement staff members responsible for this case are Diane M. Romaniuk, Melissa Cavers, Robert Howell, Scott Williamson, and Rosemary Hollinger.
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CFTC’s Commodity Pool Fraud Advisory
The CFTC has issued several customer protection Fraud Advisories that provide the warning signs of fraud, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves individuals and firms, often unregistered, offering investments in commodity pools.
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.
Last Updated: August 9, 2016