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Saturday, February 25, 2023
Maui: Feds Take Aim at Alleged $145M Ponzi
By News Release @ 12:02 AM :: 2931 Views :: Maui County, Law Enforcement

CFTC Charges Several People and Companies in a $145 Million Ponzi Scheme

Charges Include Lying to the National Futures Association to Conceal the Fraud

News Release from Commodity Futures Trading Commission, February 23, 2023

Washington, D.C. — The Commodity Futures Trading Commission today announced it filed a civil enforcement action in the U.S. District Court for the Southern District of Texas, charging fraud and misappropriation against Marcus Todd Brisco of Wailuku, Hawaii and his companies Yas Castellum LLC of Denver, Colorado, and Yas Castellum Financial LLC of Wailuku, Hawaii; Tin Quoc Tran of Katy, Texas; Francisco Story of Draper, Utah; Fredirick “Ted” Safranko of Vancouver or Ontario, Canada; Michael Shannon Sims of either Sunny Isles Beach, Florida or Roswell or Atlanta, Georgia; and SAEG Capital General Management LP (SAEG) of Draper, Utah.

The complaint alleges that beginning in approximately April 2020, Tran, Brisco and his companies, and Sims were involved with three interconnected commodity pool scams that fraudulently solicited and misappropriated pool participant funds. The complaint further alleges that Story, Safranko, and SAEG lied to the National Futures Association (NFA) in order to conceal one or more of the scams.

In its continuing litigation, the CFTC seeks full restitution to defrauded pool participants, disgorgement of any ill-gotten gains, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.

CFTC Obtains Statutory Restraining Order

On February 6, 2023, District Court Judge Lee Rosenthal entered a statutory restraining order against the defendants, freezing their assets, and giving the CFTC immediate access to their books and records. In addition, the court scheduled a preliminary injunction hearing for February 22, 2023.

Case Background

As alleged in the complaint, Tran operated a fraudulent scheme from approximately April 2020 to the present. He directly accepted at least $144,043,883 from approximately 913 pool participants. Some, if not all, of the funds were intended for trading either forex or margined or leveraged gold-U.S. dollar pairs. However, Tran did not send any pool participant funds to a trading firm; rather, he misappropriated some of the pool participant funds by using them to pay invoices, a loan, individuals not involved with the commodity pool, and to subsidize his unrelated businesses. 

Further, as alleged in the complaint, from approximately October 2020 to May 2022, Brisco and Yas Castellum LLC misrepresented to potential pool participants Yas Castellum LLC ’s historical trading records; how they would trade pool participant funds; where they would maintain pool participant funds; and who would do the trading. Based on these material misrepresentations and omissions, at least 43 pool participants transferred no less than $470,780 to Yas Castellum LLC to participate in its purported commodity pool. Rather than trade pool participant funds, Brisco and Yas Castellum LLC, with the direction and assistance of Sims, transferred the funds to entities Tran controlled.

The complaint further alleges that Brisco closed Yas Castellum LLC and then launched Yas Castellum Financial LLC in June 2022. Brisco and this new company engaged in many of the same misrepresentations and omissions as the former company. Based on these material misrepresentations and omissions, at least 57 pool participants transferred approximately $1,585,261 to participate in Yas Castellum Financial LLC’s purported commodity pool. However, Yas Castellum Financial LLC also misappropriated pool participant funds by transferring most of the funds to a Tran-controlled entity, and by Brisco paying himself for purported trading profits that did not exist.  

According to the complaint, to conceal Tran’s scheme from regulators, Story, Safranko, and SAEG knowingly submitted falsified bank statements to the NFA during an examination of SAEG.

The CFTC appreciates the assistance of the NFA.

The Division of Enforcement staff responsible for this matter are Alison B. Wilson, Sean Hennessy, Maura Viehmeyer, Erica Bodin, and Rick Glaser. 

CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories and Articles, including the Commodity Pool Fraud Advisory, which provides information 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 Commission before investing funds. If an entity is 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) or file a tip or complaint online or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected, paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.

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News Release from National Futures Association Aug 19, 2022

The financial watchdog found Yas and Marcus Brisco failed to receive funds in the name of its commodity pool and commingled pool funds with the property of other persons.

Yas Castellum LLC, a Denver-based commodity pool operator, and its principal Marcus Brisco from membership have been permanently banned by the National Futures Association, the US regulator announced.

Marcus Brisco, former principal and associated person of Yas Castellum, will no longer be able to act as a principal of an NFA Member following failures to operate its commodity pool as a separate legal entity.

Failure to operate as a separate legal entity

The financial watchdog found Yas and Marcus Brisco failed to receive funds in the name of its commodity pool and commingled pool funds with the property of other persons.

Additionally, the regulator claims Marcus Brisco failed to uphold high standards of commercial honor and just and equitable principles of trade by, among other things, operating the commodity pool in a manner that showed no regard for safeguarding the money they solicited and accepted from the pool participants.

Both Yas and Brisco didn’t answer the complaint issued by NFA’s Business Conduct Committee (BCC). After failing to cooperate in NFA’s examination of Yas, both the entity and Brisco were banned from membership.

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SA:  Maui man accused in alleged $146M Ponzi scheme


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