Another Ponzi scheme bites the dust

From the Commodities Futures Trading Commission:

Federal Court Order Freezes Assets of Illinois Commodity Pool Operator Brookshire Raw Materials Management, LLC and its Canadian Principals Based on CFTC Charges of Misappropriating More Than $4.6 Million in a Ponzi Scheme

The U.S. Commodity Futures Trading Commission (CFTC) announced today that it obtained a federal court order freezing the assets and prohibiting the destruction of documents of a Barrington, Illinois commodity pool operator, Brookshire Raw Materials Management, LLC (BRM), and its principals John M. Marshall and Stephen Z. Adams, Brookshire Raw Materials Group, Inc. (BRMG) and Brookshire and Company, Ltd. (BCL), all of Toronto, Ontario, Canada…

As alleged in the CFTC’s complaint, between September 2006 and December 2008, Marshall, Adams, and BRM accepted millions of dollars from customers for investment in a commodity pool known as the Trust and operated as a Ponzi scheme. The Trust is governed by a Private Placement Memorandum (PPM), which, among other things, states that each fund in the commodity pool will invest customer proceeds in a portfolio of commodity futures and forward contracts designed to approximately replicate the investment methodology of corresponding indices developed and managed by BRMG. However, as alleged, Marshall and Adams, as agents and officers of BRM, BRMG, and BCL withdrew more than $5 million from the Trust account and wired those funds to bank accounts in Canada, mostly in the care of Marshall.

Five million bucks isn’t a pimple on an elephant’s arse nowadays, but a million here, a million there and pretty soon you’re talking about billions. Or is that trillions?

Stay tuned. Enjoy the fun.

Comments

Sheba says:

John Marshall spent alot of this money sponsoring a huge fishing tournament in Toronto called catch walter

Weird. The Madoff folks were involved with fishing too, via Abel Reels.

Believe you me, scamming and fishing are not necessarily associated – despite fishing folks’ penchant for stretching the truth, it’s always about 1) the fish they said they lost, or 2) the fish they caught that was half the size of reality when the camera was unavailable.

Dennis Rennie says:

I am a ex friend of John Marshall. I helped him bring his boat across from Port Delusie. We are neighbors for the last 6 years. We went out many times in limos and had very expensive dinners together. We aren’t in the same snack bracket as the Marshalls. He started out as a great friend but after a while I discovered that he was a control person. He tried to sell me property in Port Severn and stuck me for a repair bill on his Jeep. As far as I’m concerned he spent everybody’s money before he earned it. He put on a wealthy man’s front and burned a lot of people doing it. John had his fishing boat for sale last spring for $80,000 and his house is up for sale. He has lowered the price on the home but still hasn’t sold yet. If he had kept in touch with his friends and talked about problems as friends do I would not be writing this article. I hope life doesn’t win in the end John.

Sheba says:

http://www.youtube.com/watch?v=GQusRIjZz18

John M Marshall is in the above promo video for his fishing tournament, he is the guy @ 0:09seconds

http://www.youtube.com/watch?v=gnqsJNfHXRY this video is the news report on the scandal

kbarton10 says:

I keep hearing that the Madoff offspring have the largest chunk of Thomas & Thomas rods – I haven’t been able to confirm the rumor, but enough forum denizens claim it’s so to smell smoke .. The T&T page has no mention of anything.

At least they liked to fish!

Those type of folks may have done some equity financing, but I’ve often seen some type of wrangling above and beyond that, like mezz structures (at least amongst more financially sophisticated buying-types). The only secured creditor I found for T&T was TD BankNorth N.A. And while it’s a stretch, TD is enjoined in a lawsuit filed by some Madoff clients – seems TD, through acquisitions was owner of another institution that was once a custodian of Madoff assets.

Again, it’s a stretch, but digging usually starts that way.

On a related note…did you know, KB, that T&T is housed on ‘Barton Street’? (smiles ensue)

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