WEST PALM BEACH (CN) - Two Floridians who ran Churchill Clearing Corp. took $555,000 in "fees" from $1 million they took from suckers for "illegal, off-exchange" precious metals trades on which they never invested a dime, nor delivered anything, the CFTC claims in court.
The Commodity Futures Trading Commission sued Vertical Integration Group LLC dba Churchill Clearing Corp., Richard V. Morello and Junior Alexis, in Federal Court.
Morello controlled the telemarketing scam and Alexis solicited customers for it, the CFTC says in the 12-page lawsuit. Alexis lives in Boynton Beach and Morello's "last known residence" was Lake Worth.
They claimed to buy, sell and trade precious metals.
Their company, Vertical, "introduced customers to Hunter Wise Commodities ... a precious metals dealer," the CFTC said. A federal judge, however, froze Hunter Wise's assets in February 2013, and enjoined it from doing the business it claimed to do.
Vertical rustled up 39 suckers who forked over $1 million to Hunter Wise, for which Vertical took commissions and fees of $554,566, the CFTC says in the complaint.
However, "Neither Vertical nor Hunter Wise bought, sold, loaned, stored or transferred any physical metals for these financed precious metals transactions. Likewise, neither Vertical nor Hunter Wise actually delivered any precious metals to any customers with respect to these financed transactions," the CFTC says.
It seeks disgorgement, restitution an injunction and penalties.
As a general rule, it may be unwise to send money to strangers who call you up on the phone and ask for it.