| PROGRESSIVE INVESTMENT FUNDS |
CFTC 2:11-CV-03445 |
NFA ID: 0374772 |
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| 0375945 | CILLI, VICTOR EUGENE | 05/29/2012 | | 0374772 | PROGRESSIVE INVESTMENT FUNDS | 05/29/2012 |
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| 0375945 | CILLI, VICTOR EUGENE | • CEA 4b(a) - FRAUDULENT TRANSACTIONS PROHIBITED | | | | • CEA 9(a)(4) - FALSE STATEMENT/FELONY VIOLATION | | | | • CEA 4o(1)(A) - FRAUDULENT TRANSACTIONS CPO/CTA | | | | • CFTC4.7(b)(3)(i) - FAILURE TO TIMELY DISTRIBUTE CPO ANNUAL REPTS | | 0374772 | PROGRESSIVE INVESTMENT FUNDS | • CEA 9(a)(4) - FALSE STATEMENT/FELONY VIOLATION | | | | • CEA 4b(a) - FRAUDULENT TRANSACTIONS PROHIBITED | | | | • CFTC4.7(b)(3)(i) - FAILURE TO TIMELY DISTRIBUTE CPO ANNUAL REPTS | | | | • CEA 4o(1)(A) - FRAUDULENT TRANSACTIONS CPO/CTA |
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| 0375945 | CILLI, VICTOR EUGENE | • CFTC INJUNCTIVE ACTION | | 0374772 | PROGRESSIVE INVESTMENT FUNDS | • CFTC INJUNCTIVE ACTION |
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| 0375945 | CILLI, VICTOR EUGENE | • FINE DELINQUENT | 09/18/2012 | | | | • MAKE RESTITUTION TO CUSTMERS | 05/29/2012 | | | | • OTHER (SEE NARRATIVE) | 05/29/2012 | | | | • STOP SOLICITING | 05/29/2012 | | | | • MAY NOT APPLY TO REGISTER | 05/29/2012 | | | | • FINE $474000 | 05/29/2012 | | | | • TRADING PROHIBITION | 05/29/2012 | | | | • MAY NOT OPERATE AS PRINCIPAL | 05/29/2012 | | | | • JOINT OWED | 05/29/2012 | | | | • PERMANENT INJUNCTION | 05/29/2012 | | 0374772 | PROGRESSIVE INVESTMENT FUNDS | • FINE DELINQUENT | 09/18/2012 | | | | • OTHER (SEE NARRATIVE) | 05/29/2012 | | | | • PERMANENT INJUNCTION | 05/29/2012 | | | | • TRADING PROHIBITION | 05/29/2012 | | | | • JOINT OWED | 05/29/2012 | | | | • FINE $474000 | 05/29/2012 | | | | • STOP SOLICITING | 05/29/2012 | | | | • MAY NOT APPLY TO REGISTER | 05/29/2012 | | | | • MAY NOT OPERATE AS PRINCIPAL | 05/29/2012 | | | | • MAKE RESTITUTION TO CUSTMERS | 05/29/2012 |
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| June 15, 2011
CFTC Charges Victor E. Cilli and his company, Progressive Investment Funds LLC, with Operating a Commodity Pool Ponzi Scheme and Misappropriating Customer Funds
New Jersey resident and his company allegedly defrauded investors of more than $500,000.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today charged Victor Eugene Cilli and his company, Progressive Investment Funds LLC (Progressive), both of Hackensack, N.J., with operating a commodity pool Ponzi scheme that defrauded at least four investors of approximately $506,000. Cilli also is charged with misappropriating at least $200,000 of pool funds to pay personal expenses, including meals, entertainment, motorcycle payments and hair salon visits. Progressive is a CFTC-registered Commodity Pool Operator, and Cilli is registered as an Associated Person of Progressive.
According to the complaint filed on June 15, 2011, in the U.S. District Court for the District of New Jersey, from at least September 2006 through February 2009, defendants Cilli and Progressive used false statements in offering memoranda and verbal misrepresentations to mislead pool participants about Cilli’s business and futures trading track record. For example, the defendants falsely told investors that Cilli was a successful business manager and futures trader but failed to disclose Cilli’s $13.5 million bankruptcy in 2002 or that his actual futures experience was limited to about one month of trading, according to the complaint.
As part of the fraud, Cilli provided pool participants with false and misleading statements showing profits when, in fact, most of Cilli’s trading resulted in losses, according to the complaint. To convince investors that the profit statements were true, Cilli allegedly returned some funds from prior investors back to pool participants in a manner similar to a Ponzi scheme.
Cilli also allegedly provided the National Futures Association (NFA) with false information concerning the composition of the pool and failed to maintain required pool documents with the NFA.
In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of the federal commodities laws.
The CFTC thanks the U.S. Attorney’s Office for the District of New Jersey and NFA for their assistance in this matter.
CFTC staff responsible for this action are W. Derek Shakabpa, Judith M. Slowly, David Acevedo, Lenel Hickson, Stephen J. Obie and Vincent McGonagle.
Media Contacts
Dennis Holden
202-418-5088
Last Updated: June 15, 2011
May 30, 2012
Federal Court in New Jersey Orders Victor Eugene Cilli and His Company, Progressive Investment Funds LLC, to Pay over $700,000 in Restitution and Penalty in Commodity Pool Ponzi Scheme
Cilli also pled guilty to related fraud and other criminal charges
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) has obtained a federal court consent order requiring defendants Victor Eugene Cilli and his company, Progressive Investment Funds LLC (Progressive), both formerly of Hackensack, N.J., to pay, jointly and severally, restitution of $243,000 and a $474,000 civil monetary penalty in connection with operating a commodity pool Ponzi scheme that defrauded investors of over $500,000 and misappropriated investor funds (see CFTC Press Release 6053-11, June 15, 2011).
The court’s order also finds that the defendants made false statements to the National Futures Association (NFA), failed to distribute required reports to pool participants, and failed to keep required books and records.
The consent order of permanent injunction, entered on May 29, 2012, by Judge William J. Martini, of the U.S. District Court, District of New Jersey (Newark), permanently prohibits Cilli and Progressive from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC. The order also permanently prohibits the defendants from further violations of the Commodity Exchange Act and CFTC regulations, as charged.
The order finds that between September 2006 and September 2007, the defendants engaged in a Ponzi scheme and solicited $506,000 from four individuals to trade commodity futures (primarily E-mini S&P 500 futures contracts) in a pooled account. However, the defendants used only approximately $263,000 to trade futures and had net trading losses of approximately $201,168, according to the order. Instead of disclosing the losses, the defendants sent pool participants statements falsely showing trading profits. The defendants also sent two pool participants false IRS Form 1099s, which showed net profits instead of the actual net losses, the order finds. To conceal their scheme, defendants used pool participant funds to make purported profit payments to other participants, as is typical of a Ponzi scheme, the order finds.
Further, the order finds that the defendants failed to provide pool participants with quarterly and annual Net Asset Value reports, failed to retain required pool records, and falsely told the NFA that Progressive never had pool participants.
On October 3, 2011, Cilli pled guilty to criminal securities fraud (15 U.S.C. § 78j(b) and 78ff(a) and 18 U.S.C. § 2) in connection with the fraudulent scheme described above (United States v. Victor Cilli, Crim. No. 1-660 (AET) (D. NJ), and to other, unrelated charges. In the criminal case, Cilli agreed to pay $243,000 in restitution. The consent order in the CFTC’s case gives Cilli credit for any restitution payments made in the criminal action.
The CFTC thanks the U.S. Attorney’s Office for the District of New Jersey and NFA for their assistance.
The CFTC Division of Enforcement staff members responsible for this case are W. Derek Shakabpa, Judith M. Slowly, David Acevedo, Lenel Hickson, Stephen J. Obie, and Vincent McGonagle.
Media Contacts
Dennis Holden
202-418-5088
Last Updated: May 30, 2012
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| June 15, 2011
CFTC Charges Victor E. Cilli and his company, Progressive Investment Funds LLC, with Operating a Commodity Pool Ponzi Scheme and Misappropriating Customer Funds
New Jersey resident and his company allegedly defrauded investors of more than $500,000.
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today charged Victor Eugene Cilli and his company, Progressive Investment Funds LLC (Progressive), both of Hackensack, N.J., with operating a commodity pool Ponzi scheme that defrauded at least four investors of approximately $506,000. Cilli also is charged with misappropriating at least $200,000 of pool funds to pay personal expenses, including meals, entertainment, motorcycle payments and hair salon visits. Progressive is a CFTC-registered Commodity Pool Operator, and Cilli is registered as an Associated Person of Progressive.
According to the complaint filed on June 15, 2011, in the U.S. District Court for the District of New Jersey, from at least September 2006 through February 2009, defendants Cilli and Progressive used false statements in offering memoranda and verbal misrepresentations to mislead pool participants about Cilli’s business and futures trading track record. For example, the defendants falsely told investors that Cilli was a successful business manager and futures trader but failed to disclose Cilli’s $13.5 million bankruptcy in 2002 or that his actual futures experience was limited to about one month of trading, according to the complaint.
As part of the fraud, Cilli provided pool participants with false and misleading statements showing profits when, in fact, most of Cilli’s trading resulted in losses, according to the complaint. To convince investors that the profit statements were true, Cilli allegedly returned some funds from prior investors back to pool participants in a manner similar to a Ponzi scheme.
Cilli also allegedly provided the National Futures Association (NFA) with false information concerning the composition of the pool and failed to maintain required pool documents with the NFA.
In its continuing litigation, the CFTC seeks restitution to defrauded customers, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans and permanent injunctions against further violations of the federal commodities laws.
The CFTC thanks the U.S. Attorney’s Office for the District of New Jersey and NFA for their assistance in this matter.
CFTC staff responsible for this action are W. Derek Shakabpa, Judith M. Slowly, David Acevedo, Lenel Hickson, Stephen J. Obie and Vincent McGonagle.
Media Contacts
Dennis Holden
202-418-5088
Last Updated: June 15, 2011
May 30, 2012
Federal Court in New Jersey Orders Victor Eugene Cilli and His Company, Progressive Investment Funds LLC, to Pay over $700,000 in Restitution and Penalty in Commodity Pool Ponzi Scheme
Cilli also pled guilty to related fraud and other criminal charges
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) has obtained a federal court consent order requiring defendants Victor Eugene Cilli and his company, Progressive Investment Funds LLC (Progressive), both formerly of Hackensack, N.J., to pay, jointly and severally, restitution of $243,000 and a $474,000 civil monetary penalty in connection with operating a commodity pool Ponzi scheme that defrauded investors of over $500,000 and misappropriated investor funds (see CFTC Press Release 6053-11, June 15, 2011).
The court’s order also finds that the defendants made false statements to the National Futures Association (NFA), failed to distribute required reports to pool participants, and failed to keep required books and records.
The consent order of permanent injunction, entered on May 29, 2012, by Judge William J. Martini, of the U.S. District Court, District of New Jersey (Newark), permanently prohibits Cilli and Progressive from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC. The order also permanently prohibits the defendants from further violations of the Commodity Exchange Act and CFTC regulations, as charged.
The order finds that between September 2006 and September 2007, the defendants engaged in a Ponzi scheme and solicited $506,000 from four individuals to trade commodity futures (primarily E-mini S&P 500 futures contracts) in a pooled account. However, the defendants used only approximately $263,000 to trade futures and had net trading losses of approximately $201,168, according to the order. Instead of disclosing the losses, the defendants sent pool participants statements falsely showing trading profits. The defendants also sent two pool participants false IRS Form 1099s, which showed net profits instead of the actual net losses, the order finds. To conceal their scheme, defendants used pool participant funds to make purported profit payments to other participants, as is typical of a Ponzi scheme, the order finds.
Further, the order finds that the defendants failed to provide pool participants with quarterly and annual Net Asset Value reports, failed to retain required pool records, and falsely told the NFA that Progressive never had pool participants.
On October 3, 2011, Cilli pled guilty to criminal securities fraud (15 U.S.C. § 78j(b) and 78ff(a) and 18 U.S.C. § 2) in connection with the fraudulent scheme described above (United States v. Victor Cilli, Crim. No. 1-660 (AET) (D. NJ), and to other, unrelated charges. In the criminal case, Cilli agreed to pay $243,000 in restitution. The consent order in the CFTC’s case gives Cilli credit for any restitution payments made in the criminal action.
The CFTC thanks the U.S. Attorney’s Office for the District of New Jersey and NFA for their assistance.
The CFTC Division of Enforcement staff members responsible for this case are W. Derek Shakabpa, Judith M. Slowly, David Acevedo, Lenel Hickson, Stephen J. Obie, and Vincent McGonagle.
Media Contacts
Dennis Holden
202-418-5088
Last Updated: May 30, 2012
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