The U.S. Commodity Futures Trading Commission (CFTC) has achieved a legal victory with the U.S. District Court for the District of Oregon issuing a consent order against Erik J. Hass, 53, and his firm, Simply Gains, Inc. In criminal proceedings, Hass was sentenced to 30 months in federal prison and three years supervised release for operating an investment fraud scheme. He was also ordered to pay more than $1.75 million in restitution to his victims.
Background of the Case
In January 2013, Hass founded Simply Gains, Inc., an organization he claimed supported Christian missionaries and organizations while offering significant returns for investors. Hass solicited members of his church, coworkers, and other acquaintances to invest in the organization via self-directed retirement and cash accounts. In exchange, he gave investors unsecured promissory notes and promised compounded annual returns of up to 30%.
The court’s findings reveal that from March 2013 to February 2019, Hass and Simply Gains solicited approximately $2.1 million from at least 21 individuals to invest in their forex commodity pool. Despite promises that investors’ losses would not exceed 20% of their contributions, the defendants incurred over $1 million in forex trading losses and misappropriated at least $415,000 for personal expenses, including Hass’s mortgage, credit card debts, and a Caribbean cruise.
Moreover, the defendants were found to have deceitfully attracted pool participants by exaggerating Hass’s trading experience, expertise, and past performance while assuring future profits with minimal risk. To hide their fraudulent activities and trading losses, they issued falsified account statements to pool participants, falsely indicating profitability.
