A federal court has ordered a Texas financial advisor and his firm to pay more than $13 million after finding they ran a commodities trading scheme that siphoned money from investors, funneled some of it to offshore accounts in Costa Rica, and used false statements to cover their tracks. The judgment against Walter Dunning Larrick III and Cambridge Financial Advisors LLC closes out a civil fraud case that has been building for years.
According to FX News Group, the U.S. District Court for the Northern District of Texas entered a default judgment against Larrick and Cambridge Financial Advisors, with the Commodity Futures Trading Commission announcing the outcome. The court ordered the defendants to pay $9,767,625 in civil monetary penalties plus $3,255,875 in restitution, bringing the total to more than $13 million, the outlet reported.
Court findings described in the report say Larrick and his firm fraudulently solicited and misappropriated more than $3 million from participants. The defendants had told investors their money would be used to trade futures and options tied to natural gas, oil, and gold, but the account alleges that promise masked a very different reality.
Fake Statements and a Ponzi-Style Shuffle
Per the same report, the defendants made material misrepresentations and omissions about how profitable the trading actually was, then issued false account statements to conceal what was really happening with client funds. Money taken from newer participants was allegedly used to pay off earlier ones in a pattern the account describes as akin to a Ponzi scheme.
The misappropriated funds didn't stay put, either. The outlet's report states that some of the money was used to cover Larrick's personal expenses, while other funds were sent to offshore accounts in Costa Rica.
That Costa Rica connection surfaced earlier this year in a separate development. The Tico Times reported that the CFTC's underlying 2023 complaint alleged Larrick and Cambridge collected at least $3,644,817.52 from roughly 70 investors between November 2020 and January 2023. That same outlet also reported that an American man was detained in Pavas, Costa Rica, in connection with the investment fraud case — but it was careful to note that Costa Rican and U.S. authorities had not publicly confirmed the detained man's identity as the defendant in that case, a detail that remains unresolved.
Permanent Bans and a Closed Case
Beyond the monetary penalties, the court permanently enjoined the defendants from further violations of the Commodity Exchange Act and Commission regulations as charged, and imposed permanent trading and registration bans, shutting the door on Larrick or his firm ever operating in the commodities markets again. The default judgment resolves all claims from the CFTC's original 2023 complaint, which was filed in the Northern District of Texas, according to a CFTC press release.
The size of the penalty stands out even against other recent commodities fraud cases. In a separate matter out of Colorado, courts awarded $2,072,181.64 in restitution and $1,485,920 in civil monetary penalties while issuing permanent trading bans against all defendants, according to VitalLaw. That case involved a trading pool called R2 Capital that took in about $2.4 million from four investors before racking up roughly $1.2 million in losses that were then falsely reported as profits. A related default judgment in that matter, entered in April 2018 against the so-called Vest Defendants, ordered $1,381,454.43 in restitution alongside a $925,920 civil penalty — figures that, combined, still fall well short of what a federal court has now ordered Larrick and Cambridge Financial Advisors to pay.
