Business & Tech

Laguna Niguel Man Involved in Alleged Commodities Scam

Federal prosecutors allege the resident and two other Orange County men used investors' money for personal use and issued false account statements that reflected profits.

Federal charges are being sought against Robert J. Cannone of Laguna Niguel and two other men accused of bilking investors of $1.4 million with a fraudulent commodities  pool.

Thomas B. Breen of San Juan Capistrano is named in a criminal complaint that alleges he and Cannone, and Francis Franco of Anaheim, operated  National Equity Holdings, Inc. of Laguna Niguel, without registering it,  as required by law, with the U.S. Commodity Futures Trading Commission.

The complaint alleges that between May 2009 and May 2010, Breen, along with Cannone and Franco,  solicited, and then misappropriated, as much as $1.4 million from at  least 20 people who sought investments in futures contracts.

Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.

Prosecutors said that only a portion of the customers' money was  actually traded, and when it was, their investments lost $592,631. Breen  and Cannone reportedly billed Franco as a  successful and experienced  trader,  when in fact, prosecutors said he wasn't experienced with commodity trading.

Cannone, Breen, and Franco also are charged with misappropriating  pool  participants' funds for personal use.  To conceal the alleged fraud and  trading  losses from the pool participants, the Orange County men  allegedly issued false  account statements reflecting profits.

Interested in local real estate?Subscribe to Patch's new newsletter to be the first to know about open houses, new listings and more.

After telling customers that all of their money had been lost in  trading, and promising to return their money, pool participants never  received their principal back, according to the complaint.

The three Orange County men are being charged with with fraudulent solicitation, misappropriation of customer funds and false statements.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here