Crime & Safety

Skokie Man's $2 Million Scam Nearing its End

David Sklena of Skokie was convicted in 2010 of engaging in noncompetitive trades that yielded profits in excess of $2 million for him and Edward C. Sarvey, a deceased Lemont man.

A former floor trader and member of the Chicago Board of Trade was ordered by federal court earlier this month to pay a disgorgement and civil monetary penalty of $6,608,750 for defrauding customers out of more than $2 million, the U.S. Commodity Futures Trading Commission (CFTC)announced Monday.

The court order was entered against David Sklena, of Skokie, who was convicted in 2010 of four counts of wire fraud, one count of commodities fraud and two counts of noncompetitive trading, according to a 2011 press release from Patrick Fitzgerald, United States attorney for the Northern District of Illinois.

The order requires Sklena to pay $4,956,562.50 civil monetary penalty and disgorgement of $1,652,187.50, according to a CFTC press release. Sklena is also permanently prohibited from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.

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Sklena and co-defendant Edward Sarvey, of Lemont, were indicted in March 2009 on six counts of wire fraud, one count of commodities fraud and two counts of noncompetitive futures trading in violation of the Commodity Exchange Act, according to the press release.

Sarvey, however, died in December 2009 while the case was pending.

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Trial evidence showed that Sarvey was a dual trader, executing customer orders and trading for his own account. Sklena traded only for his own account, according to the U.S. attorney's office.

"Sarvey sold 2,274 of the customers’ futures contracts to Sklena at a price that was much lower than the price that was actually trading at the time, and the trade was not executed openly and competitively as required by the Chicago Board of Trade and Commodity Futures Trading Commission rules," the release said.

The trade deprived Sarvey's customers of the opportunity to make trading profits themselves.

Sklena was  following a bench trial. He was ordered by U.S. District Judge Samuel Der-Yeghiayan to begin his sentence on Oct. 30, 2011. He was also ordered to pay more than $2 million in restitution to approximately 45 customers, including one fund that was a pool of commodity investors.

Sklena's attorneys have appealed the conviction and sentencing, according to a spokesperson for the U.S. Attorney's Office in Chicago. Sklena was released from prison Jan. 17 and remains free pending appeal.

Sklena was released from prison Jan. 17, according to the Federal Bureau of Prisons website.  Further information was not immediately available. Skokie Patch will update once new information comes in.

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