Federal Court Orders Florida Commodity Pool Operator to Pay Nearly $9 Million in Restitution

NEWS
Published
Aug 7th '23
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Relief Defendant Ordered to Disgorge More Than $2.3 Million.

 

The Commodity Futures Trading Commission (CFTC) has announced U.S. Magistrate Judge William Matthewman of the U.S. District Court for the Southern District of Florida entered consent orders resolving charges against defendant Bluprint LLC and relief defendant Kalpana Patel. 

 

The Bluprint order finds that it violated the Commodity Exchange Act (CEA) and CFTC regulations prohibiting fraud, requiring registration of commodity pool operators and associated persons, and requiring certain commodity pool disclosures and reporting. The Kalpana Patel order finds she received ill-gotten gains obtained by Bluprint and its owner, Rajiv Patel, who is now deceased.

 

The orders require Bluprint to pay $8,863,753.77 in restitution to victims of the fraud and Kalpana Patel to pay $2,334,467.25 in disgorgement. The orders resolve the CFTC’s action, initially filed January 18, 2022, with an amended complaint filed November 3, 2022. [See CFTC Press Release No. 8487-22]  

 

Case Background

The orders find Bluprint and its owner Rajiv Patel collected approximately $11.8 million from approximately 16 pool participants to trade, among other things, commodity futures and options. They misappropriated pool participants’ funds and used the funds to pay personal expenses to support Rajiv and Kalpana Patel’s lavish lifestyle, including mortgages on two Palm Beach County, Florida homes, multiple vehicle loans, personal loans totaling over $271,000, and credit cards totaling over $407,000. In furtherance of their scheme, the Bluprint order also finds Bluprint and Rajiv Patel distributed over $2.9 million to some pool participants in the manner of Ponzi payments. 

 

In addition, according to the orders, Bluprint and Rajiv Patel traded commodity futures and options in personal trading accounts held individually or with Kalpana Patel, rather than in a pool account as required. The trading resulted in significant losses, and, to conceal their fraud, Bluprint and Rajiv Patel provided pool participants with false account statements. 

 

The Bluprint order also finds, to further avoid detection, Bluprint and Rajiv Patel knowingly failed to comply with CFTC commodity pool registration requirements.

 

The CFTC cautions that orders requiring repayment of funds to victims may not always result in the recovery of lost money because the wrongdoers may not have sufficient funds or assets.

 

The Division of Enforcement staff responsible for this matter are Elsie Robinson, Monique McElwee, Jeff Le Riche, Chris Reed, and Charles Marvine. 

 

CFTC’s Commodity Pool Fraud Advisory

The CFTC has issued several customer protection Fraud Advisories and Articles, including the Commodity Pool Fraud Advisory, which warns customers about a type of fraud that involves 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 CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company. 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), file a tip or complaint online, or contact the Whistleblower Office. Whistleblowers may be 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.  

 

Source: CFTC