In a case that has been developing over the past few months, the U.S. Commodity Futures Trading Commission (CFTC) has taken another step in its actions against Dillon Michael Dean and his U.K.-registered company The Entrepreneurs Headquarters Limited (TEH).
Dean, of Longmont, Colorado, who used Bitcoin to funnel his ill-gained profits, is charged with commodity pool operator (CPO) fraud, options fraud, and failure to register with the CFTC in violation of the Commodity Exchange Act and Commission Regulations. Dean also failed to register as an associated person of a CPO.
Fines to Hit Almost $2 Million
According to the CFTC’s Order, from approximately April 2017 through its filing on January 18, the defendants solicited almost $500,000 — specifically $499,264.04 — worth of Bitcoin. This was taken from at least 127 members of the public who expected to participate in a pooled investment vehicle for trading commodity interests.
Late last week, the CFTC requested that the New York Eastern District Court enter a default judgement in favor of the Commission and against the defendants. The regulator requested that the Court orders the defendants to be held jointly liable and to make restitution in the amount of almost $500,000 plus post-judgment interest and other fines.
In the scheme, Dean promised to convert the Bitcoin he acquired using TEH websites, YouTube videos, and Facebook posts into fiat currency to invest on his customers’ behalf in a pooled investment vehicle for trading commodity interests.
The CFTC explains that pool participants were solicited to invest with the defendants by false claims of trading expertise and promises of high rates of return. In the end, it was revealed that Dean never actually engaged in trading on behalf of their customers and TEH’s purported trading profits were fictitious.
Of note is that, in addition to requiring the defendants to pay the almost $500,000 in restitution to customers, the defendants also have a $1,497,792.12 civil monetary penalty — bringing the total amount owed to a hefty $2 million. On top of the financial penalties, the Order imposed permanent trading and registration bans on the defendants.
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 to actually pay. The agency claims that it will continue to fight for the protection of customers and to ensure that wrongdoers are held accountable, and in relation provide a link to the following document that advises customers about the risks of digital currency trading.
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