U.S. Attorney Indicts North Carolina Couple For Obstructing Civil Litigation

Washington, D.C.—The U.S. Commodity Futures Trading Commission (CFTC) applauds the U.S. Attorney for the Western District of North Carolina for her indictment earlier this week of husband and wife Howell and Vernice Woltz, of Advance, North Carolina, concerning their alleged roles in obstructing a CFTC lawsuit. The indictment lays out the Woltzes’ alleged scheme to obstruct hedge fund fraud litigation that the CFTC filed against Tech Traders, LLC (Tech Traders) and others on April 1, 2004. (Tech Traders press release) The Woltzes were principals of the Sterling group of companies (Sterling Group), purported off-shore entities that invested in Tech Traders.

The CFTC’s action alleges that Tech Traders fraudulently solicited millions of dollars from investors for a hedge fund that purportedly traded commodity futures according to a “unique computerized approach” hyped as generating returns of “over 100% per year.”  One of the biggest investors – about $15 million’s worth -- was Sterling Group. Sterling Group also had its own investors.

This week’s indictment alleges, among other things, that Vernice Woltz removed documents and a computer tape from the home of Tech Trader’s accountant after the CFTC’s action was filed, and that both Woltzes conspired to prevent Vernice from being served with a CFTC subpoena for testimony and documents, and ultimately gave false testimony.

An equity receiver appointed by the court in the CFTC action froze numerous assets. Those assets included substantial amounts contributed by Sterling Group, nearly $3 million of which, to date, have been returned directly to investors, despite two unsuccessful attempts by the Woltzes to intervene in the CFTC’s case and take control of the funds.

The CFTC appreciates the efforts of the U.S. Attorney’s Office for the Western District of North Carolina and the Charlotte, North Carolina office of the FBI in bringing this indictment.