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A CFTC suit against an alleged Ponzi scheme that operated out of Omaha, NE, has resulted in a $10 million judgment leveled against two of its operators. US District Court Judge Laurie Smith Camp ordered Jonathan Arrington, 45, and Michael Kratville, 52, to pay the sanctions for what regulators say was a $4.7 million commodities scam that defrauded some 130 investors. Their colleague Michael Welke, 39, agreed last year to settle with the CFTC by paying $257,000 in restitution and $130,000 in penalties. All three men have also been indicted by a federal grand jury on multiple criminal counts of conspiracy and fraud.
From 2006 to 2008, the trio ran the companies Elite Management Holdings and MJM Enterprises, entities purportedly engaged in trading off-exchange foreign currency and metals. They claimed to produce 72-90% annual profits of the markets, even bragging that they had been pumping out 3% monthly returns since 2002. This was an impressive feat of time travel worthy of Bill and Ted’s Excellent Adventure, given that they only launched the business in 2005. MJM blew threw $3 million in bad trades, while the rest is said to have been misappropriated by distributing fictitious interest ($850,000) and expenditures on various perks like country-club memberships ($700,000).
According to court documents, Arrington, Kratville and Welke also entertained clients with over-the-top stories and some rather heroic posturing. This included a famous friendship with Warren Buffet and the assertion that MJM refused to be bought out by major traders because their main mission was ‘help the small guy get his kids through school and remain entirely proprietary.’
JONATHAN ARRINGTON
- Age: 44
- Company: Elite Management Holdings, MJM Enterprises
- Job: Commodities Trader
- Alleged Scam: Off-Exchange Forex, Metals
- Profits: 36-90% per year
- Ponzi Time: 2006-2008
- Amount of Fraud: $4.7 million
- Number of victims: 130
- Location: Omaha, NE
- Indictment: Multiple Counts of Conspiracy, Fraud
- Court: U.S. District Court, District of Nebraska
US v. Jonathan Arrington Indictment
Jonathan Arrington CFTC Complaint
MICHAEL KRATVILLE
- Age: 52
- Company: Elite Management Holdings, MJM Enterprises
- Job: Commodities Trader
- Alleged Scam: Off-Exchange Forex, Metals
- Profits: 36-90% per year
- Ponzi Time: 2005-2008
- Amount of Fraud: $4.7 million
- Number of victims: 130
- Location: Omaha, NE
- Indictment: Multiple Counts of Conspiracy, Fraud
- Court: U.S. District Court, District of Nebraska
US v. Michael Kratville Indictment
Michael Kratville CFTC Complaint
Michael A. Hackard, Meriam Hansen, Nou Lee and Jeremy Rutledge are experienced in defending and resolving clawback cases filed by Bankruptcy Trustees and SEC Receivers. If you have been a victim in a Ponzi scheme and face legal action, contact Hackard Law today.
