The Commodity Futures Trading Commission obtained a consent order requiring Tennessee residents Michael Griffis and Amanda Griffis to pay $5,528,121 in restitution to victims of their commodity pool fraud, along with a $1,355,232 civil monetary penalty. The U.S. District Court for the Middle District of Tennessee entered the order on Sept. 25, providing over $6.8 million in total monetary relief while permanently banning the couple from trading and registering with the CFTC.
The Griffises, who worked as local realtors in Clarksville, Tennessee, exploited their real estate business connections to solicit investments for a fraudulent commodity pool called 'Blessings Thru Crypto.' According to court findings, they convinced at least 145 people to contribute more than $6.5 million to what they claimed was a legitimate cryptocurrency trading operation.
The couple told investors their funds would be used to trade commodity futures on the Apex Trading Platform under guidance from an individual known only as 'Coach Wendy.' However, the CFTC investigation revealed the platform was an illegitimate copy of an overseas exchange, and the true identity of Coach Wendy remains unknown.
More than $4 million of the pool's funds were sent to the fraudulent overseas exchange, where the money was immediately transferred to various other accounts and offshore trading platforms. The remaining funds were misappropriated by the Griffises for personal expenses, including paying personal debts and purchasing consumer goods.
'This case is a stark warning to be cautious about whom you trust with your money,' said Charles Marvine, Acting Chief of the Division of Enforcement's Retail Fraud and General Enforcement Task Force. 'If an investment opportunity seems too good to be true, it almost certainly is, for you and anyone you bring along.'
The consent order resolves a CFTC enforcement action originally filed in July 2023. The case highlights how fraudsters often exploit existing business relationships and professional trust to perpetrate investment schemes. The Griffises leveraged their positions as real estate agents to gain credibility with potential investors, many of whom were their clients.
The fraudulent scheme operated by misrepresenting the nature of the trading platform and the expertise of the supposed trading advisor. Victims believed they were investing in a legitimate commodity futures trading operation when their funds were actually being sent to an illegitimate exchange and diverted for personal use.
The CFTC's enforcement action also permanently prohibits the defendants from further violations of the Commodity Exchange Act and CFTC regulations. This lifetime ban prevents the Griffises from engaging in any CFTC-regulated activities in the future.
The agency warned that orders requiring repayment to victims may not always result in recovery of funds, as wrongdoers may lack sufficient assets to satisfy judgments. Despite this limitation, the CFTC emphasized its commitment to pursuing enforcement actions against those who defraud commodity market participants.
'The agency will continue to fight vigorously to protect customers and hold wrongdoers accountable,' the CFTC stated in its press release announcing the settlement.
The case serves as a reminder for investors to conduct thorough due diligence before participating in commodity pools or similar investment vehicles. Red flags in this case included the mysterious identity of the supposed trading advisor and the use of an unverified trading platform.
Commodity pool fraud cases have become increasingly common as fraudsters exploit investor interest in cryptocurrency and digital asset trading. The CFTC has jurisdiction over commodity pools that trade derivatives based on digital assets, making these schemes subject to federal enforcement action.
The Division of Enforcement staff responsible for this matter included Elsie Robinson, Rachel Hayes, Christopher Reed, Charles Marvine, and former staff member Brett Shanks. Their work resulted in significant monetary relief for victims while ensuring the defendants face appropriate consequences for their fraudulent conduct.
This enforcement action demonstrates the CFTC's ongoing efforts to protect retail investors from commodity pool fraud and hold perpetrators accountable through both monetary sanctions and permanent industry bans. The substantial restitution order, while not guaranteeing full recovery for victims, represents the agency's commitment to seeking maximum relief in fraud cases.