U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22760 / July 25, 2013
Securities and Exchange Commission v. Trevor G. Cook, et al., Civil Action No. 09-CV-3333 (D. Minn., filed November 23, 2009)
Minneapolis-Based Fraudster Patrick Joseph Kiley Sentenced to 20 Years in Prison
The Securities and Exchange Commission announced that on July 15, 2013, the Honorable Chief Judge Michael J. Davis of the United States District Court for the District of Minnesota sentenced Patrick J. Kiley to 20 years in prison and ordered him to pay $155 million in restitution. The sentence was based on Kiley's conviction on 15 criminal counts including mail and wire fraud, conspiracy to commit mail and wire fraud, and money laundering for his role in a $194 million foreign currency trading scheme that defrauded approximately 1,000 investors. Kiley was charged on July 19, 2011, and a jury found him guilty on June 12, 2012.
Kiley is one of the defendants in a pending civil injunctive action filed by the Commission on November 23, 2009 in the United States District Court for the District of Minnesota. The Commission's action against Kiley arose out of the same facts that are the subject of the criminal case against him. The Commission's complaint alleges that from at least July 2006 through at least July 2009, Kiley and co-defendant Trevor G. Cook of Minneapolis, Minnesota, raised at least $190 million (later determined to be $194 million) from 1,000 investors through the unregistered offer and sale of investments in a purported foreign currency trading venture. According to the Commission's complaint, Cook and Kiley pooled investors' funds in bank and trading accounts in the names of entities they controlled. The Commission's complaint alleges that the foreign currency trading they conducted resulted in millions of dollars in losses, and they misused approximately one half of the investor funds to make Ponzi-like payments to earlier investors and pay for, among other things, Cook's gambling losses and the purchase of the historic Van Dusen Mansion in Minneapolis.
The Commission's complaint charges Cook and Kiley with violating Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On November 23, 2009, the Court entered a preliminary injunction order against Cook and Kiley and froze all of their assets. On March 7, 2011, the Commission also filed a civil complaint in the U.S. District Court in Minneapolis against Jason Bo-Alan Beckman and his registered investment advisory firm Oxford Private Client Group, LLC, for their roles in this scheme. On August 27, 2010, the Court entered an order of permanent injunction against Cook. The Court also appointed a receiver to marshal and preserve all of the Defendants' assets. The Commission's cases against Kiley and Beckman remain pending.
For additional information, see Litigation Release No. 21313 (November 25, 2009), Litigation Release No. 21344 (December 18, 2009), Release No. 2010-12 (January 25, 2010), Litigation Release No. 21484 (April 14, 2010), Litigation Release No. 21633 (August 27, 2010), Litigation Release No. 21879 (March 9, 2011), Litigation Release No. 21877 (March 16, 2011), and Litigation Release No. 22053 (July 22, 2011).