Capistrano Man Charged in Alleged Commodities Scam

Federal charges are being brought against a San Juan Capistrano man 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 two other Orange County men 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 Robert J. Cannone of Laguna Niguel and Francis Franco of Anaheim, solicited, and then misappropriated, as much as $1.4 million from at least 20 people who sought investments in futures contracts.

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.

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.