Office of Proceedings 

U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

www. cftc.gov 

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In the Matter of: * 

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Victor E. Cilli, and * 

Progressive Investment Funds LLC, * CFTC Docket No. SD 12-09 

Before: 

Registrants. 

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* 

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INITIAL DECISION ON DEFAULT 

Philip V. McGuire, 

Commodity Futures Trading Commission 

Appearances: David Acevedo, Chief Trial Attorney 

Background 

W. Derek Shakabpa, Esq., Senior Trial Attorney, 

CFTC Division of Enforcement 

New York, NY 

By motion dated December 5, 2012, the Commission's Division of Enforcement 

·. •,) 

("Division") has moved for entry of a default judgment against Progressive Investment Funds 

LLC ("PIF"), a commodity pool operator, and Victor E. Cilli ("Cilli"), an associated person with, 

and sole principal of, PIF, pursuant to Commission rules 3.60(g) and 1 0.93, 17 C.P.R. §§ 3.60(g) 

and 10.93 (2012), based on the failure ofCilli and PIF to answer or otherwise to appear or 

respond to the Notice oflntent to Revoke the Registration of Victor E. Cilli and Progressive 
Investment Funds LLC ("Notice"), issued by the Commission and filed by the Division on 

September 21, 2012. 

On September 24, 2012, the Commission's Notice was served on Cilli and PIF at the last 

address, in Hackensack, New Jersey, that Cilli had provided the National Futures Association for 

communications from the Commission. On October 12, 2012, the Commission's Notice was 

served on PIF at an alternate Glenrock, New Jersey address which Cilli had provided the NF A 

for service of Commission orders. 1 Thus, Cilli and PIF were properly served pursuant to CFTC 

rule 3.50.2 

Cilli and PIF did not respond to the Commission's Notice. Therefore, on November 7, 

2012, I issued a Default Notice finding that Cilli and PIF were in default. On November 14, 

2012, a copy of the Default Notice, with the Commission's Notice attached, was forwarded to 

Cilli at his current residence at the U.S. Penitentiary Lewisburg, Lewisburg, Pennsylvania.3 

Cilli arid PIF did not file a response to the Default Notice. Accordingly, this matter is ripe for 

entry of a default judgment. 

As a result of their defaults, Cilli and PIF have waived a hearing on all of the issues and 

are precluded from introducing evidence of mitigation and rehabilitation necessary to overcome 

1 See Guard Affidavits and Certifications, Exhibits 1 and 2, Division's December 5111 motion. 2 Pursuant to CFTC rule 3.30(a), 17 C.F.R. § 3.30(a) (2012), the address of each registrant as submitted on its 

application for registration or as submitted on the biographical supplement shall be deemed to be the address for 

delivery to the registrant for any communications from the Commission, including any summons, complaint, notice 

and other written documents or correspondence, unless the registrant specifies another address for this purpose. 

CFTC rule 3.30(b ), 17 C.F.R. § 3.30(b) (20 I 2), provides that each registrant, while registered and for two years after 

the termination of registration, must notify the National Futures Association ("NF A")of any change of address, and 

that failure to do so may result in an order of default in any Commission or NF A proceedings. Moreover, pursuant 

to CFTC rule 3.50, I 7 C.F.R. § 3.50 (20 12), for purposes of an action for the denial, suspension or revocation of 

registration, service upon a registrant will be sufficient if mailed by registered mail or ce1tified mail return receipt 

requested properly addressed to the registrant at the address shown on his application or any amendment thereto, and 

will be complete upon mailing. 3 See Exhibit 6, Division's December 5th motion. 

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the presumption of unfitness for registration.4 In addition, the well-plead allegations in the 

Notice, as augmented by the evidence and supplemented by the proposed findings and 

conclusions in the Division's motion, are deemed true and conclusive for purposes of finding: 

one, that Cilli is statutorily disqualified from registration under Sections 8a(2)(C), (D) and (E) of 

the Commodity Exchange Act ("Act") as amended by the Food, Conservation, and Energy Act 

of2008, Pub. L. No. 110-246, Title XIII (the CFTC Reauthorization Act of2008 ("CRA")), 

§§ 13102-13204, 122 Stat. 1651 (enacted June 18, 2008), and the Dodd-Frank Wall Street 

Reform and Consumer Protection Act of2010, Pub. L. No. 111-203, Title VII (the Wall Street 

Transparency and Accountability Act of2010) ("Dodd-Frank Act"),§§ 701-774 (enacted July 

16, 2010), to be codified at 7 U.S.C. §§ 12a(2)(C), (D) and (E); and two, that PIF is statutorily 

disqualified under section 8a(2)(C), (E) and (H) of the Act, as amended by the CRA and the 

Dodd-Frank Act, to be codified at 7 U.S.C §§ 12a(2)(C), (E) and (H). Thus, as set out below, the 

Division's motion has been granted, Cilli and PIF have been found to be statutorily disqualified 

from registration, and PIF's registration and Cilli's registration have been revoked. 

Findings of Fact 

1. Progressive Investment Funds LLC, is a Delaware limited liability company whose 

listed address with the Commission is 403 S. Maple Avenue, Glenrock, New Jersey. PIF is not a 

financial institution, registered broker dealer (or their associated person), insurance company, 

bank holding company, or investment bank holding company. PIF has been registered with the 

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The presumption of unfitness for registration under Section 8a(2) ofthe Act rests on the common-sense inference 

that once an individual or firm has undertaken serious wrongdoing- as it has been amply demonstrated that Cilli 

and PIF have done- a substantial risk exists that the individual or firm will undertake similar wrongdoing in the 

future. See In re Akar, Comm. Fut. L. Rep. ~ 22, 297 (CFTC February 24, 1986). 

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Commission as a commodity pool operator since September 27, 2006, pursuant to Section 4m of 

the Act, as amended by the Dodd- Frank Act, to be codified at 7 U.S.C. § 6m. 

2. Victor E. Cilli, since September 2006, has been registered as an associated person of 

PIF and is listed as the president and sole principal ofPIF. 5 Cilli's last address listed with the 

Commission is 170 Prospect Avenue, PH 2, Hackensack, New Jersey, 07601. Cilli is cunently 

incarcerated in the U.S. Penitentiary at Lewisburg, Pennsylvania. 6 

3. On June 15,2011, the Commission filed a civil injunctive complaint in the U.S. 

District Court for the District ofNew Jersey against Cilli and PIF ("complaint"). CFTC v. Victor 

Eugene Cilli and Progressive Investment Funds LLC, Case No. 2:11-CV-03445WJM (D. NJ 

2011) ("CFTC v. Cilli"). The Commission's complaint alleged, inter alia, that from at least 

September 2006 through approximately September 2007, Cilli had operated a Ponzi scheme that 

defrauded at least four commodity pool patiicipants out of about $506,000: by falsely 

representing that Cilli's business and futures trading track was successful; by trading only 

$263,000 of the pool's funds; by concealing the pool's actual trading losses of$200,168, and 

falsely reporting purp01ied trading profits to pool participants; by misappropriating at least 

$200,000 of pool funds to pay for unauthorized personal expenses; and by making false 

statements to the NF A, and destroying, deleting, discarding, or losing books and records 

that were subject to a CFTC subpoena, all of which were violations of various Commission 

rules and various provisions the Commodity Exchange Act ("the Act"), as amended by the 

CRA, to be codified at 7 U.S.C. § 1 et seq. 

5 ld. 

6 On February 6, 2009: PIF was permanently barred from NF A membership, and Cilli agreed to withdraw his NF A 

membership, agreed that if he sought NFA membership or associate membership, or sought to become a principal of 

an NFA, the violations alleged- i.e., that he had failed to cooperate with the NFA on an investigation of a customer 

complaint --would be deemed admitted and used as the sole basis for denying him registration, NF A membership 

or associate membership, and/or principal status, and agreed to pay a $10,000 fine if he ever re-applies for NF A 

membership. In re. Victor E. Ci!!i and Progressive Investment Funds LLC, NF A case number 08-BCC-9 (Decision 

Feb. 6, 2009). 

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4. On May 29, 2012, the District Court in CFTC v. Cilli entered a Consent Order for 

Permanent Injunction ("Consent Order") which found, in relevant part, that Cilli, in 

violation of Sections 4(b)(a)(l)(A)-(C), and 4Q(l)(A)-(B), of the Act, as amended by the CRA, to 

be codified at 7 U.S.C. §§ 6(b)(a)(l)(A)-(C), and 6Q(l)(A)-(B), had engaged in a commodity pool 

Ponzi scheme in fmiherance of which he had: misrepresented his business and trading record; 

failed to disclose substantial trading losses and instead sent to pool participants bogus IRS Forms 

1099 and bogus reports which falsely showed trading profits; committed a minor 

portion of the pool's funds to actual trades; converted pool funds for his personal expenses; 

and concealed his fraudulent scheme by improperly using pool pmiicipant funds to make 

purpmied profit payments to other pool pmiicipants. The District Court also, inter alia, 

found PIF liable for Cilli's violations, and permanently enjoined Cilli and PIF from 

further violations of Sections 4(b )(a)(l)(A)-(C), and 4Q(l)(A)-(B), of the Act, as amended by 

the CRA, to be codified at 7 U.S.C. §§ 6(b)(a)(l)(A)-(C), and 6Q(l)(A)-(B), and assessed 

restitution of$243,000 and a civil monetary penalty of$474,000. 

5. On October 3, 2011, in a separate criminal action, U.S. v. Victor Cilli, No. 11-CR00660 (AET) (D. NJ, 2011), Cilli pled guilty to securities fraud, conspiring to commit bank fraud 

and tax evasion, based on the same set of facts as charged in CFTC v. Cilli. Cilli was convicted 

of conducting a Ponzi scheme that defrauded four commodity pool participants of $506,000, 

trading only approximately $263,000 ofthe pool funds, losing approximately $200,168 ofthat 

amount, failing to disclose this information to the pool participants, sending some of the pool 

pmiicipants false statements showing profits, and misappropriating thousands of dollars to pay 

for personal expenses. On June 18, 2012, Cilli was sentenced to 36 months in prison and 

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assessed restitution of $243,000. 7 

Conclusions of Law 

Section 8a(2)(C) of the Act 

Section 8a(2)(C) of the Commodity Exchange Act ("Act"), as amended by the CRA and 

the Dodd-Frank Act, to be codified at 7 U.S.C. § 12a(2)(C), in relevant part, authorizes the 

Commission to revoke the registration of any person "if such person is permanently or 

temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction .. . 

including an order entered pursuant to an agreement of settlement to which the Commission ... is 

a party, from ... (i) acting as a futures commission merchant, introducing broker, floor broker, 

floor trader, commodity trading advisor, commodity pool operator, [or] associated person of any 

registrant under this Act ... or (ii) engaging in or continuing any activity when such activity 

involves ... fraud .... " Cause exists for statutory disqualification of Cilli and PIF pursuant to 

Section 8a(2)( C) of the Act because the Consent Order in CFTC v. Cilli, which was entered by the 

United States District Comi for the District of New Jersey, a court of competent jurisdiction, 

permanently enjoins both Cilli and PIF from committing fraud in violation of the Act. 

Section 8a(2)(D) of the Act 

Section 8a(2)(D) of the Act, as amended by the CRA and the Dodd- Frank Act, to be codified 

at 7 U.S. C. § 12a(2)(D), in relevant pmi, authorizes the Commission to revoke the registration of any 

person "if such person has been convicted within ten yems preceding the filing of the application for 

registration or any time thereafter of any felony that... (iv) involves the violation of section ... 1343 ... 

of title 18, United States Code ... " Cause exists for the statutory disqualification of Cilli pursuant to 

7 See Exhibits 3, 4 and 5, Division's December 5th motion. 

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Section 8a(2)(D), based on his conviction in US. v. Cilli for fraud and misappropriation in 

connection with his operation of a commodity pool. 

Section 8a(2)(E) of the Act 

Section 8a(2)(E) of the Act, as amended by the CRA and the Dodd-Frank Act, to be codified 

at 7 U.S.C. § 12a(2)(E), in relevant part, authorizes the Commission to revoke the registration of 

any person "if such person, within ten years preceding the filing of the application [for registration] 

or any time thereafter, has been found in a proceeding brought by the Commission ... (i) to have 

violated any provision of [the] Act... where such violation involves ... fraud [or] misappropriation of 

funds ... " Cause also exists pursuant to Section 8a(2)(E) of the Act, because, in CFTC v. Cilli, Cilli 

and PIF were each found to have violated the Act for conduct involving fraud and misappropriation. 

Section 8a(2)(H) of the Act 

Section 8a(2)(H) of the Act, as amended by the CRA and the Dodd-Frank Act, to be 

codified at 7 U.S.C. § 12a(2)(H), in relevant pmi, authorizes the Commission to revoke the 

registration of any person if "revocation of the registration of any principal of such person would be 

warranted because of a statutmy disqualification listed in this paragraph." Section 8a(2)(H) of the 

Act fu1iher provides that the term "principal," as used in Section 8a(2) of the Act, includes a general 

partner of a partnership or a person who owns more than 10% of the voting shares of a corporation. 

Because Cilli is listed with the Commission as PIF's sole principal, owns more than a 10% financial 

interest !n PIF, and is subject to the revocation of his registration pursuant to Section 8a(2)(C), (D), 

and (E) of the Act, as an1ended, PIF's registration is also subject to revocation pursuant to Section 

8a(2)(H) of the Act, as amended. 

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ORDER 

Victor E. Cilli is statutorily disqualified from registration under Sections 8a(2)(C), (D) 

and (E) of the Commodity Exchange Act, and Progressive Investment Funds LLC is statutorily 

disqualified under Sections 8a(2)(C), (E) and (H) of the Commodity Exchange Act. 

Accordingly: the Division's motion for entry of a default judgment is hereby granted; Victor E. 

Cilli and Progressive Investment Funds LLC are unfit for registration; and the registrations of 

Victor E. Cilli and Progressive Investment Funds LLC are hereby revoked. 

Dated February 7, 2013. 

,/;1 ry~(/..:_ 

P~cGuire, Judgment Officer 

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