by James Welsh on September 14, 2012
Anyone who thinks about running a low-profile scam that busy federal agents may not have time to spend on should consider the case of Charles Steven Goodie. He’s certainly no Bernard Madoff, but the U.S. Government has gone after Goodie, a relatively small-time California commodities wheeler-dealer, with both barrels.
Charles Steven Goodie lives in San Marcos, Calif. He and his company, CSG Commodity Service Group, operated in the San Diego area. They have now been nailed with both a criminal charge and a civil consent decree socking them for nearly $1.2 million in penalties and restitution orders.
The U.S. Commodity Futures Trading Commission obtained the consent order from Judge William Q. Hayes in the Southern District of California. Among other things, it bars Charles Steven Goodie and his company from the commodities business and issues a $700,000 civil penalty. In addition, Goodie was ordered to make restitution of $494,633.
The CFTC charged that from May 2008 through March 2011, Goodie solicited $494,000 from 15 investors for a commodities pool. He told investors their money would be used to trade futures contracts in natural gas, oil, copper and silver, with profits being shared by members of the pool.
What Charles Steven Goodie did not tell them, the CFTC charged, was that he would be using some of their money to cover his personal expenses. To disguise the irregularities, he sent phony account statements to pool participants, investigators said.
The CFTC first filed a complaint against Goodie on Nov. 23, 2011. Regulators threw a fistful of charges against him to see what would stick, and apparently, almost everything did.
He was charged with making false statements, solicitation fraud, misappropriation of investor funds, and improper operation of a commodity pool. The CFTC also charged Goodie with being an unregistered pool operator, failing to register as an associated person of a commodity pool operator, and failing to comply with disclosure requirements.
On the criminal side, Charles Steven Goodie was accused of fraudulently obtaining more than $500,000 by soliciting commodity pool investments, and soliciting loans from some investors to pay margin calls. He promised to repay the margin call loans, and also sent out phony account statements showing “substantial positive earnings,” prosecutors said. Goodie also assured investors that their purported earnings were being reinvested in additional futures contracts.
The final straw came when Goodie used a wire transfer to move $42,500 from a customer’s bank in Michigan to his company’s account in California.
In the end, Goodie was charged with a single criminal count of wire fraud. He pleaded guilty in U.S. District Court and is scheduled to be sentenced Nov. 5. At the moment, he remains free on a $100,000 personal recognizance bond.
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James Welsh is a financial writer specializing in compliance and securities fraud issues. He also writes the daily “Top 10/Street Patrol” column at www.thestreetsweeper.org, and has held staff editing and writing positions at daily newspapers including The Orange County Register in Southern California and The Times-Picayune of New Orleans.