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Michigan Hedge Fund Frauds Fined $3.1M


Date: Tuesday, February 12, 2008
Author: FINalternatives.com

In sickness, health and hedge fund fraud: A husband-and-wife pair has been ordered to pay more than $3 million for allegedly defrauding investors in their hedge fund.

A federal judge in Michigan has ordered Ty and Monette Klotz to pay $1.8 million in restitution and $1.3 million penalties. The Commodity Futures Trading Commission accused the couple of running a Ponzi scheme, promising investors in its Aurifex Commodities Research and Aurifex Research funds 20% monthly returns.

In fact, according to the CFTC, the Klotzes used the more than $2 million raised from 352 investors to pay other investors, as well as to fund some high living. Investor money was allegedly used to pay for his-and-hers Rolex watches, home renovations, medical treatments and cars.