The U.S. Commodity Futures Trading Commission (CFTC) has obtained a federal court Order imposing $44 million in sanctions against Robert J. Andres of Houston, TX; his company, Winsome Investment Trust (“Winsome”); Robert L. Holloway of San Diego, CA; and his company, US Ventures LC (“US Ventures”); for fraud in operating a commodities futures pool. The sanction includes a civil monetary penalty of over $32 million as well as a restitution award of $12 million to be paid to defrauded investors. The Order also imposes upon the individuals and companies a permanent trading and registration ban.
According to the Order entered by the Honorable Bruce S. Jenkins of the U.S. District Court for the District of Utah, Andres and Winsome (from May 2005 through November 2008) fraudulently solicited and accepted over $50 million from investors who were told that they would be investing in a commodity futures pool operated by Holloway and US Ventures. To garner the investors’ funds, Andres and Winsome purportedly made false statements claiming that the investment program had a successful track record and that each investor would be guaranteed a return of his/her principal plus profits. The Court found those representations to be false, as Holloway and US Ventures’ futures trading actually suffered nearly $11 million in net losses.
The Court went on to conclude that the defendants misappropriated the majority of participant funds to pay investors false “profits” in a manner akin to a Ponzi scheme and that the defendants used investor funds for other improper purposes, such as providing money to Andres’ wife, funding Holloway’s and his wife’s lavish personal expenses (houses, cars, jewelry, etc.), and investing in various unrelated and undisclosed businesses including a business Holloway’s wife ran on eBay. The Court Order explained that Andres and Holloway attempted to conceal the fraud by directing employees to falsify participants’ account records and to falsely represent to investors that the pool funds were trading profitably with virtually no losses during the relevant period.
In parallel criminal actions pending in federal court in Utah, both Andres and Holloway have been indicted for their fraudulent acts and are pending trial (Holloway) and sentencing (Andres) later this year.
Silver Law Group has successfully recovered multi-million dollar awards for its clients in a wide variety of investment fraud cases throughout the country and abroad. In recognition of its work, Silver Law Group was recently named the Commodities Law Firm of the Year by Finance Monthly magazine, an award that “reflect[s] the very best of those professionals working in or within the finance industry today.” Silver Law Group routinely represents investors in NFA arbitration, CFTC reparations and in State of Federal court. If you have questions about your legal rights, or have been the victim of investment fraud, contact Scott L. Silver to discuss your legal matter in a free consultation. CONTACT: Silver Law Group, 11780 W. Sample Road, Coral Springs, FL 33065; Telephone: (800) 975-4345 (Toll Free); Web site: www.silverlaw.com; E-mail: ssilver@silverlaw.com.