UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff, 

v. 

TATE STREET TRADING, INC. and 

LEONARD J. CIPOLLA, 

Defendants. 

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) CIVIL ACTION NO. 3: l 9-cv-00690-JAG 

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CONSENT ORDER FOR PERMANENT INJUNCTION 

RESTITUTION AND ANCILLARY EQUITABLE RELIEF 

AGAINST DEFENDANT LEONARD J. CIPOLLA 

I. INTRODUCTION

On September 19, 2019, the Commodity Futures Trading Commission 

("Commission'' or "CFTC") filed its Complaint (ECF No. 1) in this matter against Tate Street 

Trading, Inc. ("Tate Street") and Leonard J. Cipolla ("Cipolla") (collectively "Defendants") 

seeking injunctive and other equitable relief for vio1ations of the Commodity Exchange Act (the 

"Act"), 7 U.S.C. §§ 1-26 (2018), and Commission Regulations ("Regulations"), 17 C.F.R. §§ 1-

190 (2020) 

II. CONSENTS AND AGREEMENTS

To effect settlement of all charges alleged in the Complaint against Cipolla without a trial 

on the merits or any further judicial proceedings, Cipolla: 

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1. Consents to the entry of this Consent Order for Permanent Injunction, Restitution 

and Ancillary Equitable Relief Against Defendant Leonard J. Cipolla ("Consent Order"); 

2. Affirms that he has read and agreed to this Consent Order voluntarily, and that no 

promise, other than as specifically contained herein, or threat, has been made by the CFTC or 

any member, officer, agent, or representative thereof, or by any other person, to induce consent 

to this Consent Order; 

3. Acknowledges service of the summons and Complaint; 

4. Admits the jurisdiction of this Cou11 over him and the subject matter of this action 

pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1 (2018); 

5. Admits the jurisdiction of the CFTC over the conduct and transactions at issue in 

this action pursuant to the Act; 

6. Admits that venue properly lies with this Court pursuant to 7 U.S.C. § 13a-l(e); 

7. Waives: 

(a) Any and all claims that he may possess under the Equal Access to Justice 

Act, 5 U.S.C. § 504 (2018) and 28 U.S.C. § 2412 (2018), and/or the rules 

promulgated by the CFTC in conformity therewith, Part 148 of the 

Regulations, 17 C.F.R. pt. 148 (2020), relating to, or arising from, this 

action; 

(b) Any and all claims that he may possess under the Small Business 

Regulatory Enforcement Fairness Act of 1996, Pub. L. No. 104-121, tit. II, 

§§ 201-253, 110 Stat. 847, 857-74 (codified as amended at 28 U.S.C. 

§ 2412 and in scattered sections of 5 U.S.C. and 15 U.S.C.), relating to, or 

arising from, this action; 

(c) Any claim of Double Jeopardy based upon the institution of this action or 

the entry in this action of any order imposing a civil monetary penalty or 

any other relief, including this Consent Order; and 

(d) Any and all rights of appeal from this action; 

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8. Consents to the continued jurisdiction of this Court over him for the purpose of 

implementing and enforcing the terms and conditions of this Consent Order and for any other 

purpose relevant to this action, even if Defendant now or in the future resides outside the 

jurisdiction of this Court; 

9. Agrees that he will not oppose enforcement of this Consent Order on the ground, 

if any exists, that it fails to comply with Rule 65(d) of the Federal Rules of Civil Procedure and 

hereby waives any objection based thereon; 

10. Admits that in United States v. Leonard J. Cipolla, Case No. 3:19-cr-126 (E.D. 

Va., Richmond Division), Cipolla pleaded guilty to violating: (i) 18 U.S.C. §§ 1341, 

981(a)(l)(C), as incorporated by 28 U.S.C. § 2461(c); and 7 U.S.C §§ 6(m)(l), 6n, 13(a)(5), and 

further acknowledges that in connection with that plea, Cipolla admitted to the facts set forth in 

the "Factual Basis" (ECF No. 9, entered September 19, 2019), a copy of which is attached as 

Exhibit A to this Order. 

11. Admits all of the findings of fact made by the Court in Section Ill.A, below; 

12. Agrees to provide immediate notice to this Court and the CFTC by certified mail, 

in the manner required by paragraph 72 of this Consent Order, of any bankruptcy proceeding 

filed by, on behalf of, or against him, whether inside or outside the United States; and 

13. Agrees that no provision of this Consent Order shall in any way limit or impair 

the ability of any other person or entity to seek any legal or equitable remedy against Cipolla in 

any other proceeding. 

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III. FINDINGS OF FACT AND CONCLUSIONS OF LAW 

The Court, being fully advised in the premises, finds that there is good cause for the entry 

of this Consent Order and that there is no just reason for delay. The Court therefore directs the 

entry of the following findings of Fact, Conclusions of Law, permanent injunction and equitable 

relief pursuant to Section 6c of the Act, 7 U.S.C. § l 3a-1 (2018), as set forth herein. 

THE COURT HEREBY FINDS: 

A. Findings of Fact 

The Parties to this Consent Order 

14. Plaintiff Commodity Futures Trading Commission is an independent federal 

regulatory agency charged by Congress with responsibility for administering and enforcing the 

provisions of the Act, 7 U.S.C. §§ 1-26 (2018) and the Commission Regulations promulgated 

thereunder, 17 C.F .R. pts. 1-190 (2020). 

15. Defendant Leonard Joseph Cipolla is currently incarcerated in a federal prison in 

Hopewell, Virginia. He served as the president and treasurer of Tate Street. Cipolla has never 

been registered with the CFTC in any capacity. 

The Purpose and Organization of Tate Street Trading 

16. Cipolla established Tate Street to facilitate his trading of various financial 

instruments, including futures and options. 

17. Cipolla acted as a Commodity Trading Advisor ("CTA") because for 

compensation or profit he provided commodity trading advice to individuals who placed funds 

with Tate Street ("pool participants"). 

18. Tate Street did not segregate pool participant funds into specific accounts to be 

traded separately on behalf of each pool participant. Instead, Cipolla pooled all of the funds Tate 

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Street accepted and used those funds to trade in numerous accounts maintained in the name of 

Tate Street. 

19. Cipolla and his wife are the sole officers and directors of Tate Street. Cipolla 

controls the day-to-day operations ofTate Street and was responsible for Tale Street's bank and 

trading accounts. His wife plays no role in operations of Tate Street. 

Cipolla's Acceptance of Pool Participant Funds 

20. Beginning in 2009, Cipolla accepted funds from pool participants, promising a 

fixed rate of return over a period of months or years. 

21. During the Relevant Period, Cipolla accepted $7,096,303.25 from pool 

participants for the purpose of trading futures and options. Cipolla received those funds through 

the mail and via wire transfers, both means of interstate commerce. 

22. At Cipolla's direction, pool participants transferred funds via check, wire, and 

electronic transfer into bank accounts in the name of Tate Street. Cipolla established and was 

solely responsible for the bank accounts operated by Tate Street. 

23. A number of pool participants received written agreements from Tate Street 

memorializing the amount(s) of money each initially placed with Tate Street, the promised fixed 

minimum rate of return, and the duration of the agreement. 

24. Cipolla was solely responsible for drafting the agreements provided to pool 

participants. 

25. Based on their interactions with Cipolla, pool participants whose agreements were 

not reduced to writing understood that Tate Street promised a fixed minimum rate of return over 

a period of months or years. 

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26. Some of the agreements entered into by Tate Street and various pool participants 

provided for monthly or other periodic payments by Tate Street to the pool participants. 

27. Based on their interactions with Cipolla, pool participants understood that the 

funds they placed with Tate Street were for trading futures and options. 

Cipolla's Representations About Promised Returns 

28. Based on their interactions with Cipolla, various pool participants understood that 

he did very well trading. Typically, Tate Street promised pool participants returns of between 

8% and 30% per year. 

29. Cipolla told at least two prospective pool participants that he made a 25% return 

on investments. 

30. Cipolla told at least one prospective pool participant that he could make her a lot 

of money trading options. 

31. Cipolla told at least one prospective pool participant that he retained as 

compensation any profits beyond the returns promised to pool participants. 

32. Cipolla told at least one pool participant that Defendants never suffered any losses 

until 2018. 

33. In 2018, Cipolla told at least one prospective pool participant that while 

Defendants had good and bad months trading, Cipolla made money trading overall. 

34. Cipolla told at least one prospective pool participant that Defendants had 

protections against losses. 

35. Cipolla told prospective pool participants that he would retain any trading profits 

above the rate of return Defendants promised. 

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36. Cipolla provided some prospective pool participants with documents (sometimes 

styled "month-to-month cash flow statement") purporting to show how their funds would 

increase over the life of their agreement with Defendants. 

Cipolla 's Representations and Omissions About Use of Pool Participant Funds 

37. When prospective pool participants inquired about how Cipolla anticipated 

generating the promised returns, Cipolla explained that he traded options, including options on 

oil futures contracts and options on S&P 500 futures contracts, among others. 

38. Based on their interactions with Cipolla, pool participants believed that all of the 

funds placed with Tate Street would be traded on their behalf. 

39. Cipolla did not tell prospective pool participants that their funds would be used to 

pay his business and personal expenses. 

40. Cipolla did not tell prospective pool participants that their funds would be used to 

make payments to other pool participants. 

Cipolla Misappropriated Pool Participant Funds to Pay Personal and Business 

Expenses While Using Only a Fraction of Pool Participant Funds to Trade 

41. As noted above, Cipolla accepted $7,096,303.25 from pool participants. Of those 

funds, Cipolla misappropriated $2,506,958.64 for business expenses or personal use, while using 

only $1,462,834.08 to trade futures and options. Jn addition, as described further below Cipolla 

misappropriated pool participant funds to make Ponzi-like payments to pool participants. 

42. Cipolla initially deposited funds received from pool participants into one of two 

bank accounts maintained in the name of Tate Street. From there, some of the funds were 

transferred to trading accounts maintained in the name of Tate Street. 

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43. Cipolla alone decided which Tate Street bank account would receive pool 

participant funds. Cipolla also decided when to transfer pool participant funds into the Tate 

Street trading accounts. 

44. During the Relevant Period, Defendants maintained at least eighteen trading 

accounts at various futures commission merchants and other brokerage houses. During the 

Relevant Period, Cipolla traded futures and options. 

45. Despite having accepted $7,096,303.25 from pool participants, Cipolla transferred 

only $1,462,834.08 of pool participant funds into trading accounts. 

46. During the Relevant Period, Cipolla used pool participant funds to pay for 

business and personal expenses. For example, during a portion of the relevant period, Cipolla 

made monthly payments of approximately $5,000 to his wife from the bank accounts of Tate 

Street to cover personal household expenses. 

47. Cipolla also used funds drawn from the Tate Street bank accounts to make loans 

or gifts to various individuals, and to fund a restaurant. 

Cipolla Misappropriated Pool Participant Funds to Make Periodic Payments to 

Other Pool Participants 

48. Cipolla used pool participant funds to make Ponzi-like payments to other 

participants. 

49. Based on his dealings with Cipolla, at least one pool participant who received 

payments from Tate Street understood that the monthly payments were strictly from trading 

profits. 

50. During the Relevant Period, Cipolla made $3,066,827.73 in periodic payments to 

pool participants. 

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51. Some pool participants received payments from Cipolla that exceeded the 

amounts those participants placed with Tate Street. Other pool participants received payments 

from Cipolla that did not exceed the amounts those pool participants placed with Tate Street, 

while still oLher pool participants received no payments from Cipolla. 

52. The difference between the total amount placed by those pool participants who 

received partial or zero payments from Cipolla and the payments received by those pool 

participants is $5,102,283.51. 

53. As described below, for most of the Relevant Period, Cipolla was unprofitable 

trading pool participant funds. To the extent that Cipolla's trading generated profits, those 

profits were not sufficient to sustain the periodic payments to pool participants. 

54. On several occasions, after depositing funds provided by one pool participant into 

Tate Street's bank accounts, Cipolla made payments from those accounts directly to other pool 

participants. 

Cipolla Misrepresented Tate Street's Trading Performance; Cipolla's 

Trading Was Not Profitable Overall 

55. Cipolla was solely responsible for developing and executing Tate Street's trading 

strategies and decisions. 

56. As described above, Cipolla told various prospective pool participants that he had 

a good track record as a trader. 

57. In the period June through December 2009, Cipolla's net transfers into Tate Street 

trading accounts totaled $10,000.00. Tate Street's trading was not profitable in any month that 

year and resulted in net loss of $8,534.40 for 2009. 

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58. During 2010, Cipolla's net transfers into Tate Street trading accounts totaled 

$83,000.00. Tate Street's trading was profitable during only five months of the year and resulted 

in a net loss of $12,442.14 for 2010. 

59. During 2011, Cipolla's net transfers into Tate Street trading accounts totaled 

$183,230.76. Tate Street's trading was profitable during only four months of the year and 

resulted in a net loss of $37,513.98 for 2011. 

60. During 2012, Cipolla's net transfers into Tate Street trading accounts totaled 

$269,232.00. Tate Street's trading was profitable during nine months of the year and resulted in 

a net gain of$236,558.45 for 2012. 

61. During 2013, Cipolla's net transfers into Tate Street trading accounts totaled 

$213,994.16. Tate Street's trading was profitable during only six months of the year and resulted 

in a net loss of$453,083.64 for 2013. 

62. During 2014, Cipolla's net transfers into Tate Street trading accounts resulted in 

$125,771.43 being withdrawn from the trading accounts. Tate Street's trading was profitable 

during eight months of the year and resulted in a net gain of$100,576.35 for 2014. 

63. During 2015, Cipolla 's net transfers into Tate Street trading accounts totaled 

$157,995.83. Tate Street's trading was profitable during only four months of the year and 

resulted in a net loss of $445,152.17 for 2015. 

64. During 2016, Cipolla's net transfers into Tate Street trading accounts totaled 

$387,992.44. Tate Street's trading was profitable during only six months of the year, and 

resulted in a net loss of$109,044.97 for 2016. 

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65. During 2017, Cipolla's net transfers of pool pa11icipant funds into Tate Street 

trading accounts totaled $203,000.00. Tate Street's trading was profitable only five months of 

the year, and resulted in a net loss of$583,116.13 for 2017. 

66. During 2018, Cipolla's net transfers of pool participant funds into Tate Street 

trading accounts totaled $80,160.32. Tate Street's trading was profitable only two months of the 

year, and resulted in a net loss of$149,633.41 for 2018. 

67. From January through April 2019, Cipolla did not transfer any pool participant 

funds into Tate Street trading accounts. Although Cipolla did not trade in the Tate Street trading 

accounts during January through April 2019, the trading accounts continued to incur fees. 

68. In sum, during the Relevant Period, cumulative deposits of pool participant funds 

by Cipolla into Tate Street trading accounts totaled $1,462,834.08 Trading with those funds 

resu]ted in a cumulative net loss of $1,462,305.84. 

Cipolla Provided Statements to Pool Participants That Did Not Accurately 

Reflect Tate Street's Trading Performance 

69. Cipolla promised to provide monthly or quarterly statements to pool participants. 

70. At least one pool participant signed an agreement provided by Tate Street which 

provided that statements would be issued once a month, "typically the last week of the month or 

after the monthly trading is complete." 

71. Cipolla provided periodic statements to pool participants. Those statements 

typically referred to an "interest rate per month,, and "interest earned.,, 

72. Based on their interactions with Cipolla, pool participants understood that the 

statements they received from Cipolla reflected funds held on their behalf by Tate Street. 

73. The statements Cipolla provided to pool participants did not accurately reflect 

Cipolla's trading results using pool participant funds. 

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74. Despite substantial trading losses during the Relevant Period, none of the 

statements Defendants provided to pool participants gave any indication that pool participant 

funds had been lost. 

75. Cipolla sent the periodic statements to pool participants by means of interstate 

commerce, typically by mail. 

B. Conclusions of Law 

Jurisdiction and Venue 

76. This Court has jurisdiction over this action under 28 U .S.C. § 1331 (2018) 

(federal question jurisdiction) and 28 U.S.C. § 1345 (2018) (district courts have original 

jurisdiction over civil actions commenced by the United States or by any agency expressly 

authorized to sue by Act of Congress). Section 6c of the Act, 7 U.S.C. § 13a-l (2018), authorizes 

the Commission to seek injunctive relief against any person whenever it shall appear that such 

person has engaged, is engaging, or is about to engage in any act or practice that violates any 

provision of the Act or any rule, regulation, or order promulgated thereunder. 

77. Venue properly lies with the Court pursuant to Section 6c(e) of the Act, 7 U.S.C. 

§ 13a-l (e) (2018), because Cipolla resided in this District, Cipolla transacted business in this 

district, and the acts and practices in violation of the Act occurred within this District. 

Cipolla Violated Section 4b(a)(l)(A)-(C) of the Act, 

7 U.S.C. § 6b(a)(l)(A)-(C) (2018) 

78. 7 U.S.C. § 6b(a)(l)(A)-(C) makes it unlawful for any person to: (A) cheat or 

defraud or attempt to cheat or defraud another person; (B) willfully to make a false report or 

statement to another person; or (C) willfully to deceive or attempt to deceive another person by 

any means whatsoever in connection with any contract of sale of any commodity in interstate 

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commerce or for future delivery, that is made, or to be made, on or subject to the rules of a 

designated contract market. 

79. By the conduct described in paragraphs 16 through 70 above, Cipolla violated 

7 U.S.C. § 6b(a)(l)(A)-(C) by misappropriating pool participants' funds, by making material 

misrepresentations with scienter, and by willfully issuing false statements. 

Cipolla Violated Section 4o(l)(A) and (B) of the Act, 7 U.S.C. § 6o(l)(A), (B) (2012) 

80. 7 U.S.C. § 60(1 )(A) and (B) (2018), in relevant part, makes it unlawful for a 

CTA, by use of the mails or any other means of interstate commerce, directly or indirectly, to: 

(A) employ any device, scheme, or artifice to defraud any customer; or (B) engage in any 

transaction, practice, or course of business that operates as a fraud or deceit upon any customer. 

81. 7 U.S.C. § 60( 1 )(A) and (B) applies to all CT As, whether registered, required to 

be registered, or exempted from registration. 

82. 7 U.S.C. § la(12) (2018), defines a CTA as any person who for compensation or 

profit, engages in the business of advising others as to the value or advisability of trading in, 

among other things, futures contracts or forex transactions. 

83. By the conduct described in paragraphs 15 through 73 above, Cipolla violated 

7 U .S.C. § 60( 1 )(A) and (B) by knowingly or recklessly employing schemes to defraud pool 

participants and engaging in transactions, practices, and courses of business that operated as a 

fraud or deceit upon pool participants. More specifically, Cipolla misappropriated pool 

participants' funds, made material misrepresentations with scienter, and willfully issued false 

statements. 

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Cipolla Violated Section 6c(b) of the Act,7 U.S.C. § 6c(b) (2018), and 

Regulation 32.4(a)-(c), 17 C.F.R. § 32.4(a)-(c) (2020) 

84. 7 U.S.C. § 6c(b) of the Act states, in relevant part: 

No person shall offer to enter into, enter into or confirm the execution 

of, any transaction involving any commodity regulated under this Act 

which is of the character of, or is commonly known to the trade as, an 

"option", "privilege", "indemnity", "bid", "offer", "put", "call", 

"advance guaranty", or "decline guaranty", contrary to any rule, 

regulation, or order of the Commission prohibiting any such 

transaction or allowing such transaction under such terms and 

conditions as the Commission shall prescribe. 

85. 17 C.F.R. § 32.4 (a)-(c) makes it unlawful for any person, directly or indirectly, 

to: (a) cheat or defraud or attempt to cheat or defraud any other person; (b) willfully to make or 

cause to be made to the other person any false report or statement; or (c) to deceive or attempt to 

deceive any other person by any means whatsoever, in or in connection with any commodity 

option transaction. 

86. By the conduct described in paragraphs 16 through 73 above, Cipolla violated 

7 U.S.C. § 6c(b) and 17 C.F.R. § 32.4(a)-(c) by: (i) misappropriating pool participant funds; 

(ii) making, causing to be made, and distributing to pool participants reports or statements that 

contained false information; and (iii) fraudulently soliciting pool participants, all in connection 

with purported trading of commodity options. 

Cipolla Violated Section 4m(l) of the Act, 7 U.S.C. § 6m(l) (2018) 

87. 7 U.S.C. § 6m(l) makes it unlawful for any CTA to make use of the mails or any 

means or instrumentality of interstate commerce in connection with its business unless it is 

registered with the CFTC. 

88. Section 1a(l2) of the Act, 7 U.S.C. § la(l2) (2018), in relevant part, defines a 

CTA as "any person who, for compensation or profit, engages in the business that is of advising 

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others , either directly or through publications, writings, or electronic media, as to the value of or 

the advisability of trading" commodity futures or options. 

89. By the conduct described in paragraphs 16 through 73 above, Cipolla violated 

7 U.S.C. § 6m(l) by making use of the mails or any other instrumentality of interstate commerce 

in connection with his business as a CT A without having registered as a CTA. 

IV. PERMANENT INJUNCTION 

IT IS HEREBY ORDERED THAT: 

90. Based upon and in connection with the foregoing conduct, pursuant to Section 6c 

of the Act, 7 U.S.C. § 13a-l (2018), Cipolla is permanently restrained, enjoined and prohibited 

from directly or indirectly: 

a. Cheating or defrauding, or attempting to cheat or defraud other persons; issuing or 

causing to be issued false reports; and willfully deceiving or attempting to deceive 

other persons in connection with any order to make, or the making of, any 

contract of sale of any commodity in interstate commerce or for future delivery 

that is made, or to be made on or subject to the rules of a designated contract 

market, for or on behalf of any other person in violation of Section 4b(a)( l )(A)-

(C) of the Act, 7 U.S.C. § 6b(a)(l)(A)-(C) (2018); 

b. Using the mails or other means or instrumentalities of interstate commerce to 

directly or indirectly employ a device, scheme, or artifice to defraud clients or 

prospective clients, or engage in transactions, practices, or courses of business 

which operate as a fraud or deceit upon clients or prospective clients, in violation 

of Section 40(1 )(A) and (B) of the Act, 7 U.S.C. § 6o(I )(A) and (B) (2018); 

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c. Offering to enter into, entering into or confirming the execution of, any 

transaction involving any commodity regulated under this Act which is of the 

character of, or is commonly known to the trade as, an 'option', 'privilege', 

'indemnily1, 'bid', 'offer', 'put', 'call', 'advance guarantee', or 'decline 

guarantee', contrary to any rule, regulation or order of the Commission 

prohibiting any such transaction or al lowing such transaction under such terms 

and conditions as the Commission may prescribe, in violation of Section 4c(b) of 

the Act, 7 U.S.C. § 6c(b) (2018); 

d. In or in connection with an offer to enter into, the entry into, or the confirmation 

of the execution of, any commodity option transaction, directly or indirectly: (i) 

cheating or defrauding or attempting to cheat or defraud any other person; (ii) 

making or causing to be made to any other person any false report or statement 

thereof or causing to be entered for any person any false record thereof; or (iii) 

deceiving or attempting to deceive any other person by any means whatsoever, in 

violation of Regulation 32.4(a)-(c); 17 C.F.R. § 32.4(a)-(c) (2020); 

91. Cipolla is also permanently restrained, enjoined and prohibited from directly or 

indirectly: 

a. Trading on or subject to the rules of any registered entity (as that term is defined 

in Section la(40) of the Act, 7 U.S.C. § la(40) (2018)); 

b. Entering into any transactions involving "commodity interests" (as that term is 

defined in Regulation 1.3, 17 C.F.R. § 1.3 (2020)), for his own personal account or 

for any account in which he has a direct or indirect interest; 

c. Having any commodity interests traded on his behalf; 

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d. Controlling or directing the trading for or on behalf of any other person or entity, 

whether by power of attorney or otherwise, in any account involving commodity 

interests; 

e. Soliciting, receiving or accepting any funds from any person for the purpose of 

purchasing or selling any commodity interests; 

f. Applying for registration or claiming exemption from registration with the CFTC 

in any capacity, and engaging in any activity requiring such registration or 

exemption from registration with the CFTC, except as provided for in Regulation 

4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2020); and/or 

g. Acting as a principal (as that term is defined in Regulation 3.1 (a), 17 C.F.R. 

§ 3.1 (a) (2020)), agent or any other officer or employee of any person (as that 

term is defined in Section Ia(38) of the Act, 7 U.S.C. § la(38) (2018)), registered, 

exempted from registration or required to be registered with the CFTC except as 

provided for in 17 C.F.R. § 4. l4(a)(9) (2020). 

V. RESTITUTION 

92. Cipolla shall pay restitution in the amount of five million, one hundred two 

thousand, two hundred eighty-three dollars and fifty-one cents ($5, I 02,283 .51) ("Restitution 

Obligation"). As noted above, the Restitution Obligation represents the difference between the 

total amount placed by those pool participants who received partial or zero payments from 

Cipolla and the payments received by those pool participants. 

93. Cipolla is currently the defendant in a criminal action in which he has admitted, 

among other things, to misconduct that is at issue in this matter, United States v. Leonard J. 

Cipolla, Case No. 3:19-cr-126 (E.D. Va., Richmond Division) ("Criminal Action"). For 

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amounts disbursed to Cipolla's pool participants as a result of satisfaction of any restitution 

ordered in the Criminal Action, Cipolla shall receive a dollar-for-dollar credit against the 

Restitution Obligation. 

94. To effect payment of the Restitution Obligation and the distribution of any 

restitution payments to Cipolla's clients, the Court appoints the National Futures Association 

("NF A") as Monitor ("Monitor"). The Monitor shall receive restitution payments from 

Defendant and make distributions as set forth below. Because the Monitor is acting as an officer 

of this Court in performing these services, the NFA shall not be liable for any action or inaction 

arising from NFA's appointment as Monitor, other than actions involving fraud. 

95. Cipolla shall make Restitution Obligation payments under this Consent Order to 

the Monitor in the name "Leonard J. Cipolla- Settlement/Restitution Fund" and shall send such 

payments by electronic funds transfer, or by U.S. postal money order, certified check, bank 

cashier's check, or bank money order, to the Office of Administration, National Futures 

Association, 300 South Riverside Plaza, Suite 1800, Chicago, Illinois 60606 under cover letter 

that identifies Cipolla and the name and docket number of this proceeding. Cipolla shall 

simultaneously transmit copies of the cover letter and the form of payment to the Chief Financial 

Officer, Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, 

NW, Washington, D.C. 20581. 

96. The Monitor shall oversee the Restitution Obligation and shall have the discretion 

to determine the manner of distribution of such funds in an equitable fashion to Cipolla's clients 

identified by the CFTC or may defer distribution until such time as the Monitor deems 

appropriate. 

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97. Cipolla shall cooperate with the Monitor as appropriate to provide such 

information as the Monitor deems necessary and appropriate to identify Cipolla's pool 

participants to whom the Monitor, in its sole discretion, may determine to include in any plan for 

distribution of any Restitution Obligation payments. Cipolla shall execute any documents 

necessary to release funds that he has in any repository, bank, investment or other financial 

institution, wherever located, in order to make partial or total payment toward the Restitution 

Obligation. 

98. The Monitor shall provide the CFTC at the beginning of each calendar year with a 

report detailing the disbursement of funds to Cipolla's pool participants during the previous year. 

The Monitor shall transmit this report under a cover letter that identifies the name and docket 

number of this proceeding to the Chief Financial Officer, Commodity Futures Trading 

Commission, Three Lafayette Centre, 1155 21st Street, NW, Washington, D.C. 20581. 

99. The amounts payable to each pool participant shall not limit the ability of any 

pool participant from proving that a greater amount is owed from Cipolla or any other person or 

entity, and nothing herein shall be construed in any way to limit or abridge the rights of any pool 

participant that exist under state or common law. 

100. Pursuant to Rule 71 of the Federal Rules of Civil Procedure, each pool participant 

of Cipolla who suffered a loss is explicitly made an intended third-party beneficiary of this 

Consent Order and may seek to enforce obedience of this Consent Order to obtain satisfaction of 

any portion of the restitution that has not been paid by Cipolla to ensure continued compliance 

with any provision of this Consent Order and to hold Cipolla in contempt for any violations of 

any provision of this Consent Order. 

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101. To the extent that any funds accrue to the U.S. Treasury for satisfaction of 

Cipolla's Restitution Obligation, such funds shall be transferred to the Monitor for disbursement 

in accordance with the procedures set forth above. 

A. Provisions Related to Monetary Sanctions 

102. Partial Satisfaction: Acceptance by the CFTC or the Monitor of any partial 

payment of Cipolla 's Restitution Obligation shall not be deemed a waiver of his obligation to 

make further payments pursuant to this Consent Order, or a waiver of the CFTC's right to seek to 

compel payment of any remaining balance. 

B. Cooperation 

103. Cipolla shall cooperate fully and expeditiously with the CFTC, including the 

CFTC's Division of Enforcement, in this action, and in any current or future CFTC investigation 

or action related thereto. Cipolla shall also cooperate in any investigation, civil litigation, or 

administrative matter related to, or arising from, the subject matter of this action. 

VI. MISCELLANEOUS PROVISIONS 

104. Notice: All notices required to be given by any provision in this Consent Order 

shall be sent certified mail, return receipt requested, as follows: 

Notice to CFTC: 

Richard Glaser, Deputy Director 

Division of Enforcement 

Commodity Futures Trading Commission 

1155 2l51 Street, NW 

Washington, DC 20581 

Notice to Cipolla: 

Leonard J. Cipolla, Register Number 93766-083 

FCI Petersburg Low 

1100 River Road 

Hopewell, VA 23860 

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All such notices to the CFTC shall reference the name and docket number of this action. 

105. Change of Address/Phone: Until such time as Cipolla satisfies in full his 

Restitution Obligation as set forth in this Consent Order, Cipolla shall provide written notice to 

the CFTC by certified mail of any change to his telephone number and mailing address within 

ten calendar days of the change. 

I 06. Entire Agreement and Amendments: This Consent Order incorporates all of the 

terms and conditions of the settlement among the parties hereto to date. Nothing shall serve to 

amend or modify this Consent Order in any respect whatsoever, unless: (a) reduced to writing; 

(b) signed by all parties hereto; and (c) approved by order of this Court. 

107. Invalidation: If any provision of this Consent Order or if the application of any 

provision or circumstance is held invalid, then the remainder of this Consent Order and the 

application of the provision to any other person or circumstance shall not be affected by the 

holding. 

l 08. Waiver: The failure of any party to this Consent Order or of any client at any 

time to require performance of any provision of this Consent Order shall in no manner affect the 

right of the party or client at a later time to enforce the same or any other provision of this 

Consent Order. No waiver in one or more instances of the breach of any provision contained in 

this Consent Order shall be deemed to be or construed as a further or continuing waiver of such 

breach or waiver of the breach of any other provision of this Consent Order. 

l 09. Waiver of Service, and Acknowledgement: Cipolla waives service of this 

Consent Order and agrees that entry of this Consent Order by the Court and filing with the Clerk 

of the Court will constitute notice to the Cipolla of its terms and conditions. 

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110. Continuing Jurisdiction of this Court: This Court shall retain jurisdiction of this 

action to ensure compliance with this Consent Order and for all other purposes related to this 

action, including any motion by Cipolla to modify or for relief from the terms of this Consent 

Order. 

111. Injunctive and Equitable Relief Provisions: The injunctive and equitable relief 

provisions of this Consent Order shall be binding upon Cipolla, upon any person under his 

authority or control, and upon any person who receives actual notice of this Consent Order, by 

personal service, e-mail, facsimile or otherwise insofar as he or she is acting in active concert or 

participation with Cipolla. 

112. Counterparts and Facsimile Execution: This Consent Order may be executed in 

two or more counterparts, all of which shall be considered one and the same agreement and shall 

become effective when one or more counterparts have been signed by each of the parties hereto 

and delivered (by facsimile, e-mail, or otherwise) to the other party, it being understood that all 

parties need not sign the same counterpart. Any counterpart or other signature to this Consent 

Order that is delivered by any means shall be deemed for all purposes as constituting good and 

valid execution and delivery by such party of this Consent Order. 

113. Contempt: Cipolla understands that the terms of the Consent Order are 

enforceable through contempt proceedings, and that, in any such proceedings he may not 

challenge the validity of this Consent Order. 

114. Agreements and Undertakings: Cipolla shall comply with all of the undertakings 

and agreements set forth in this Consent Order. 

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There being no just reason for delay, the Clerk of the Court is hereby ordered to enter this 

Consent Order for Permanent Injunction, Restitution and Ancil/my Equitable Relief Againsl 

Defendant Leonard J Cipolla forthwith and without further notice. 

IT IS SO ORDERED on this )!_day of __ _ 

CONSENTED TO AND APPROVED BY· 

Leonard J. Cipolfa 7 

FCI Petersburg •Low 

1100 River Road 

Hopewell, VA 23860 

Dated: 

• I 

3 i 1/ / ~i)-£2/ 

I 

JOHN 1'nffiliS"fa~,lljistrict J dge 

UNITED STATES DISTRICT JUDGE 

~

~ ---

Commodity tures Trading Commission 

1155 21 st Street, NW 

Washington, DC 20581 

(202) 418-5362 

jgarcia@cftc.gov 

23 

Dated: O'S\ ()S \ '2..C'·2.. \ 

\ \ 
Exhibit A 

ECFNo. 9 

United States v. Cipolla, Case No. 3:19-cr-126-JAG

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IN THE UNITED STATES DISTRICT COURT FOR THE 

EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

UNITED STATES OF AMERICA 

Case No. 3: I 9CR 126-JAG 

v. 

LEONARD J. CIPOLLA, 

De.fe11da111. 

STATEMENT OF FACTS 

The parties stipulate that allegations contained in the Criminal Information and the 

following facts arc true and correct, and that had this matter gone to trial, the United States would 

have proven each of them beyond a reasonable doubt. 

Count One: Mnil Fraud 

1. The defendant, Leonard J. Cipolla owned and operated Tate Street Trading, Inc., 

later renamed Tate Street Capital, Inc. (collectively "Tate StrceC), based in Chesterfield, Virginia. 

2. The Commodity Futures Trading Commission ("CFTC") was an agency of the 

United States Government with oversight of the entire commodity futures industry. 

3. Regulatory responsibilities of the CFTC include, but arc not limited to, the 

regulation of commodity pools, which may engage in transactions involving commodity futures 

and commodity options. 

4. A commodity pool is an entity in which multiple individuals or entities contribute 

funds in order to trade futures or futures options as a group. A commodity pool is intended to 

enable the investors to make investments as a group that they might not be able to or want to make 
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individually, and to minimize the risks to individual investors by enabling them to invest in a 

broader range of investment opportunities. 

5. A commodity pool operator is a person engaged in a business in the nature of an 

investment trust or similar form of enterprise and who solicits, accepts, or receives funds from 

others for the purpose of trading in commodity futures contracts. 7 U.S.C. § I a(5). Typically, 

the funds received from investors by a commodity pool operator arc combined in commodity pools 

and used to trade in commodity futures contracts or commodity options. 

6. Commodity pool operators are required to be registered with the CFTC unless they 

qualify for an exception under the Commodity Exchange Act and/or CFTC regulations. 

7. Trading of commodity futures and options usually lakes place in trading accounts 

held at a futures commission merchant registered with the CFTC. A futures commission 

merchant is an individual or entity. similar to a brokerage house. which solicits or accepts orders 

to buy or sell commodity futures or options in accordance with the rules of an exchange. 

8. Between in or about 2009 through in or about March 2019, in the Eastern District 

of Virginia and elsewhere, the defendant, LEONARD J. CIPOLLA~ devised a scheme and artifice 

to defraud and for obtaining money and property by means of materially false and fraudulent 

pretenses, representations and promises, and attempting to do so, did knowingly place and caused 

to be placed in any post office or authorized depository for mail matter. any matter and thing 

whatever to be sent and delivered by the Postal Service; deposit and caused to be deposited any 

matter and thing whatever to be sent and delivered by any private and commercial interstate carrier; 

and caused to be delivered by mail and such carrier any matter and whatever according to the 

direction thereon. 

9. CIPOLLA solicited individuals to invest money with him through his company 

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Tate Street Trading. In doing so, CIPOLLA made and caused to be made material 

misrepresentations and omissions to induce these individuals to invest money. The specific 

misrepresentations CIPOLLA made to investors varied over time, but included the following 

statements: 

a. CIPOLLA told investors that their money would be used to trade in commodity 

futures contracts and commodity options. 

b. CIPOLLA represented that he was an experienced trader with a history of 

profitable trading performance. 

c. CIPOLLA represented that Tate Street Trading was qualified to manage taxdeferred retirement accounts. and that investors· tax-deferred retirement 

accounts in fact were rolled into individual tax-deferred retirement accounts 

managed by Tate Street Trading. 

d. CIPOLLA represented that he made money on profits generated from his 

trading, and did not inform individuals that he also used money from the 

principal they invested with him. 

e. CIPOLLA did not inform investors that their money would be used for his own 

personal expenses, and to repay earlier investors. 

I 0. CIPOLLA signed promissory notes with many investors that promised a specific 

rate of return. CIPOLLA also represented that investors could withdraw their money with 30 to 

60 days· notice. 

11. CIPOLLA provided many investors with account statements purporting to show 

that the individual's principal was intact, and growing at the promised rate of return. 

12. In fact, CIPOLLA only transferred a portion of the money he collected from 

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investors to futures commission merchants for the purpose of pooling the money to trade 

commodity futures contracts and commodity options. Each lime CIPOLLA opened a trading 

account at a futures commission merchant, CIPOLLA represented that he was not registered as a 

broker or a financial advisor, and he falsely represented that he did not solicit individuals for 

investment purposes. and that none of the funds he traded were pooled on behalf of other 

individuals. Ultimately. CIPOLLA lost nearly all the money he used to trade commodity flnurcs 

contracts and commodity options. 

13. CIPOLLA used the majority of the money he solicited from individuals for 

unauthorized purposes, including paying his own personal expenses and repaying earlier investors. 

14. In furtherance of this scheme to defraud, CIPOLLA caused mailings through the 

United States mail and private mail carriers. including mailings of investor funds. Many of these 

mailing came to addresses within the Eastern District of Virginia. For example, on or about 

March 22, 2017, CIPOLLA knowingly caused to be delivered by mail and any private and 

commercial interstate carrier, to CIPOLLA's business address at 420 I Cheyenne Road, Richmond, 

a mailing containing a TD Ameritrade check in the amount or $317,276.23, which funds 

constitULcd the transfer of a Tate Street investor's Individual Retirement Account c·tRA ") from 

TD Ameritrade to what CIPOLLA had led the investor, E.M., to believe would be a tax-deferred 

retirement account managed by Tate Street. 

15. As a result of this scheme to defraud, CIPOLLA fraudulently obtained millions of 

dollars from more than 30 investors. 

Count Two: Unregistered Commoditv Pool Operator 

16. From in or about 2009 through in or about ivlarch 2019. in the Eastern District of 

Virginia and elsewhere, LEONARD J. CIPOLLA knowingly. willfully. and unlawfully used, and 

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caused to be used, the mails and other means of interstate commerce to conduct business as a 

commodity pool operator. During this period, CIPOLLA was not registered as a commodity pool 

operator with the Commodity Futures Trading Commission and was not exempt by relevant statute 

or regulation from being so registered. 

17. The actions taken by the defendant, as described above in Counts One and Two, 

were taken willfully and knowingly. The defendant did not take those actions by accident, 

mistake, or with the belief that they did not violate the law. 

18. The preceding only includes those facts necessary to establish the defendant's guilt 

as to the offense to which he is entering a guilty plea. It docs not necessarily reference all 

infonnation known to the government or the defendant about the criminal conduct at issue. 

Respectfully submitted, 

G. ZACHARY TERWILLIGER 

UNITED STATES ATTORNEY 

By:-~------~----

Katherine Lee Martin 

Thomas A. Garnett 

Assistant United Slates Attorneys 

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After consulting with my attorney and pursuant to the plea agreement entered into this 

day between myself and the United States, I stipulate that the above Statement of Facts is tmc 

and accurate, and that had the matter proceeded to trial, the United States would have proved the 

same beyond a reasonable doubt. 

I am Leonard J. Cipolla's attorney. I have carefully reviewed the above Statement of 

Facts with him. To my knowledge~ his decision to stipulate to these facts is an informed and 

voluntary one. 

6