May 23, 2013
Following a Bench Trial, Federal Court in Florida Orders Defendants William and Gregory Center to Pay Millions in Restitution and Civil Monetary Penalties for Operating a $28.4 Million Ponzi Scheme
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Daniel Hurley of the U.S. District Court for the Southern District of Florida, following a bench trial on April 24, 2013, entered a Final Judgment Order, ordering Defendant William Center, of Richmond, Virginia, to pay restitution of $455,430 individually and $8,652,140.41 jointly and severally with Trade, LLC, as well as a $4 million civil monetary penalty. Defendant Gregory Center, of McLean, Virginia, was ordered to pay $265,661.14 in restitution and a $2 million civil monetary penalty.
The Order stems from a Complaint filed against Defendants Philip Milton, William Center, Gregory Center, and Trade, LLC on June 22, 2010 (see CFTC Press Release 5848-10) The Complaint charged the Defendants with operating a Ponzi scheme, misappropriating at least $9.6 million of pool funds for their personal use and to continue the scam, and fraudulently soliciting approximately $28.4 million from at least 2,000 customers to participate in a commodity pool to trade futures and securities. The Complaint also named four Relief Defendants, all corporations owned by the individual Defendants, for receiving funds as a result of the Defendants’ misappropriation to which they have no legitimate entitlement. The CFTC charges against Defendants Philip Milton and Trade, LLC, and against the Relief Defendants, were resolved via supplemental consent Orders entered by the court on April 24, 2013 (see CFTC Press Release 6590-13).
On February 18, 2011, and July 29, 2011, the court entered consent Orders of permanent injunction against William Center and Gregory Center, respectively. The Centers consented to liability but left the matters of restitution, disgorgement, and civil monetary penalties to be resolved by agreement. However, the CFTC and the Centers were unable to reach an agreement; therefore, the parties proceeded to trial on April 24, 2013, in front of Judge Hurley. Judge Hurley’s Final Judgment was entered on May 17, 2013. The judge also entered a Memorandum Opinion in the matter (see the Related Links).
The CFTC appreciates the assistance of the U.S. Securities and Exchange Commission and the Florida Office of Financial Regulation.
CFTC Division of Enforcement staff members responsible for this case are Jason Mahoney, Timothy J. Mulreany, George Malas, Paul Hayeck, and Joan Manley.
Last Updated: May 23, 2013