Federal Court Fines Two Florida Men Over $1.6M for Precious Metals Fraud

The Commodity Futures Trading Commission yesterday announced the U.S. District Court for the Middle District of Florida entered consent orders on March 1 for permanent injunction, monetary sanctions, and equitable relief against Marvin W. Courson III (Courson) and Christopher A. Kertatos (Kertatos). Both Courson and Kertatos reside in Florida.

Previously, the U.S. District Court for the Middle District of Florida had entered an order of judgment against two other parties to the suit, The Alista Group, LLC (Alista) of Orlando, Florida, and Luis M. Pineda Palacios, a/k/a Luis Pineda of Orlando, Florida.

The court imposed fines and penalties totaling more than $1.6 million, that include a $560,152.60 civil monetary penalty as well as separate customer restitution of $560,152.60 on Courson, and a $274,988 civil monetary penalty as well as separate customer restitution of $274,988 on Kertatos. The orders also impose permanent trading and registration bans and a permanent injunction prohibiting the defendants from further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged. The orders resolve the CFTC's enforcement case filed on July 16, 2020.

According to the orders, from July 2016 through approximately January 2018, Courson and Kertatos defrauded customers intending to engage in illegal, off-exchange retail commodity transactions involving precious metals by misappropriating their funds to speculate in precious metals for Alista's own account; paid Alista's business expenses; and made Ponzi-style payments to customers who attempted to cash out some of their purported holdings. At all times during Alista's operation, Courson was in control of its various bank accounts, business operations, and hiring decisions.

In addition, Kertatos individually defrauded some of Alista's customers by using individual and/or corporate bank accounts under his personal control to accept Alista customer funds. He then misappropriated those funds to pay for personal and other expenses unrelated to leveraged precious metals transactions on behalf of Alista's customers.