A longtime Augusta businessman has been ordered to pay $400,000 in federal fines for operating a fraudulent commodity trading service on the Internet.
George Marshall Heffernan, 50, must pay a civil penalty of $125,000, plus $275,000 for "ill-gotten gains" from bogus day-trading courses he offered in 2000 and 2001. The ruling was issued Monday in Augusta by U.S. District Court Judge Dudley Bowen.
Mr. Heffernan and his wife sold their Evans home last year and moved to Myrtle Beach, S.C. The former insurance broker and liquor store owner did not return a phone message left at his home Thursday.
The court order stemmed from two lawsuits by the U.S. Commodity Futures Trading Commission, which charged that Mr. Heffernan's sites, www.accutrader.com and www.logitechtrading.com, fraudulently solicited consumers.
The Web sites, neither of which was registered with the commission, stated that Mr. Heffernan's day-trading system produced enormous profits, when, in fact, his personal trades resulted in losses exceeding $20,000, the commission said.
The commission also said Mr. Heffernan rarely took a market position but told clients he risked his own money on trades he recommended.
Susan Bovee, the policy and review chief for the commission's enforcement division, said the government does not know how much Mr. Heffernan made from the sites.
"We made as much effort as we could to identify the assets of Mr. Heffernan," she said. "The court made a specific note that he did not cooperate in that effort."
The $400,000 will be deposited in the U.S. Treasury, Ms. Bovee said. Victims seeking restitution will have to pursue Mr. Heffernan through state courts.
Mr. Heffernan has family ties to the Augusta area and operated several area businesses, including an unregistered insurance company in the early 1990s that was investigated by state regulators.
The venture ended up with Mr. Heffernan's indictment in Richmond County in 1994 after being unable to pay claims from policy holders. However, the charges - felony and misdemeanor theft by taking and misdemeanor counts of issuing a false insurance document - were dismissed in 1996, according to county records.
In addition to Mr. Heffernan's other business ventures, he briefly owned the Wm. J. Heffernan & Co. insurance brokerage on Reynolds Street, which was founded by his father in 1938.
Mr. Heffernan sold the brokerage in 1995 to current owner Richard Capps, who said many people mistakenly believe Mr. Heffernan is still affiliated with the company.
"No Heffernans have any ties to this business whatsoever," Mr. Capps said.
Mr. Heffernan is operating another Web site, www.indexanalysisservice.com, which markets a "No Loss Hedge Trading Method."
As part of the court order, he is required to post the following statement on any Web site, mailing or other material he creates to solicit commodities trading business:
"I have violated the Commodity Exchange Act, CFTC regulations, and a CFTC order. After being sued by the CFTC in federal court, I have been ordered to disgorge $275,000 in ill-gotten gains and pay $125,000 in civil monetary penalties for my illegal conduct. The order in my case was issued by the United States District Court for the Southern District of Georgia and can be found in volume 245 of the federal supplement beginning on page 1,276. My case number was CV 101-141."
As of Thursday evening, the statement was not posted on Mr. Heffernan's new Web page.
Reach Damon Cline at (706) 823-3486 or firstname.lastname@example.org.
© 2016. All Rights Reserved. | Contact Us