CFTC Alleges Fraud in Ag Commodity Case

CFTC Charges Nebraska Commodity Pool Operator With Fraud

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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The Commodity Futures Trading Commission is accusing a Nebraska commodities company and its president of fraud for misappropriating approximately $790,000. The company also was not registered with the CFTC to operate a commodity pool. (CFTC seal)

OMAHA (DTN) -- The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against a Nebraska commodity marketer and grain merchandiser, accusing the man and his business of operating an unregistered agricultural commodity pool and misappropriating most of the money.

The CFTC complaint filed in the U.S. District Court for Nebraska seeks an injunction and restitution against Terry Michael Svejda of Blair, Nebraska, and his company, Centurion Capital Management Inc., of fraudulently soliciting at least $790,050 from 27 people to invest in a commodity pool, Decadian LLC, for agricultural commodity contracts, but the CFTC alleges roughly 80% of the funds were misappropriated.

Centurion Capital Management Inc. is a company in Omaha, Nebraska, as the sole manager of the Decadian commodity pool, but never registered with the CFTC as a commodity pool operator or registered Svejda as an associated person for Centurion. Svejda is Centurion's president, secretary, treasurer and sole director.

It should be noted that multiple companies around the country operate under the name "Centurion Capital" that are not related to the CFTC charges against Svejda and his businesses.

The CFTC stated Svejda operated a commodity advisory subscription service, sending out newsletters to subscribers with advice on agricultural commodities, and many of the subscribers were farmers. Starting in 2012, Svejda formed Centurion and Decadian to market a new commodity pool. Svejda would call and email people to participate in the pool, including some who were already subscribers to his newsletter. Svejda stated the pooled funds would be traded in agricultural commodity futures such as those on the Chicago Mercantile Exchange.

Svejda essentially solicited all of the pool participants and was the only one who communicated with them, the CFTC stated. He also controlled all the bank accounts involved with the pool funds, as well as related commodity trading accounts. Over time, Svejda transferred $784,650 in pool participant funds to multiple bank accounts, including personal accounts in his name, and other business accounts, as well as personal futures trading accounts in Svejda's name, the CFTC alleged. Funds were used to pay personal expenses and Centurion's corporate expenses.

The CFTC stated in the court complaint that Svejda and his companies violated multiple sections of the Commodity Exchange Act, including fraud in connection with commodity futures contracts, as well as commodity pool fraud. The CFTC also charged Svejda and his companies for failing to register as a commodity pool operator, and not listing associated persons with the pool. Another charge relates to commingling pool participant funds and failure to provide disclosure documents to participants.

The CFTC complaint seeks an order from the courts on Centurion and Svejda's violations, as well as a permanent injunction that would prohibit Centurion, Svejda, their affiliates, agents and employees from soliciting or receiving funds for buying or selling of commodities or trading or entering into any transactions involving commodity interests, or having commodities traded on their behalf.

The CFTC also seeds an order to halt funds, including salaries, commissions and revenues related to the violations that occurred, and make full restitution to the 27 people affected by the company's actions.

Decadian, according to a news release from the company, promoted that commodity markets could offer greater returns than stocks, bonds or derivatives, "with less risk." Svejda hosted webinars on the "Decadian Method" that would provide investors with "buy and sell alerts" along with commodity tutorials and market new updates. The company's slogan is "Decadian, the currency of trust."

Svejda's LinkedIn profile shows him as president and founder of Decadian LLC, as well as president of Ag Masters Marketing Group LLC. Svejda's company websites for Decadian LLC and his other investment businesses are no longer active. Svejda's profile stated he has a long history as a grain merchandiser but began focusing on marketing strategies before creating Ag Masters Marketing Group and Decadian.

DTN reached out to Svejda at Decadian's business phone, which is still active for customers. Svejda did not immediately respond to a phone message.

CFTC news release and complaint on the case: https://www.cftc.gov/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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Chris Clayton