A federal judge has meted out a civil penalty to a Staten Island man accused of running a scam with a virtual currency.

The decision by U.S. District Judge Jack Weinstein of the Eastern District of New York gave the U.S. Commodity Futures Trading Commission one of its first trial wins in its aggressive approach to crack down on virtual currency fraud.

Weinstein found that, through a company called CabbageTech Corp., Patrick McDonnell ran a “bold and vicious” fraud by holding himself out as an investment adviser in virtual currencies, slapping him with a civil penalty of more than $871,000.

The penalty was triple what McDonnell made from his “boiler room” scheme, the judge said, because of the nature of the fraud, and also placed him under a permanent injunction.

The McDonnell case was one of two enforcement actions that the CFTC brought in the Eastern District this year, and attracted the attention of outside parties expressing concern about the commission's jurisdictional authority.

An attorney for Monex Credit Co. moved to file an amicus brief in the case, arguing in a court filing that the CFTC, which was given greater power under the 2010 Dodd-Frank Act to regulate the swaps market, was overstepping the jurisdiction it is afforded under the Commodities Exchange Act to go after fraud and that its interpretation of the statute would lead to “absurd results,” enabling it to “regulate all grocery store goods in interstate commerce.”

Monex, a precious metal brokerage firm, has had past success in challenging the CFTC's jurisdiction. The commission accused Monex of fleecing customers for $290 million through leveraged gold transactions, but a judge in the U.S. District Court for the Central District of California found that the agency has the ability to bring enforcement actions when both fraud and market manipulation are present, rather than one or the other.

But in a ruling in the McDonnell case, Weinstein said the commission has standing to bring the enforcement action, finding that the agency has broad statutory authority to regulate the virtual currencies market.

In his order to assess McDonnell with civil penalties, Weinstein said that McDonnell misled investors by running a fictional Wall Street firm, complete with a made-up address and imaginary employees.

McDonnell appeared pro se in the case, despite Weinstein's efforts to insist that he should have counsel, arguing a motion for reconsideration on the judge's denial of his motion to dismiss and cross-examining three witnesses.

Weinstein referred McDonnell to the New York City Bar Association's pro se clinic and was provided with a pro bono attorney, but according to Weinstein's ruling, McDonnell cut himself off from the clinic in May, expressing concern that the two firms he met with through the program were using their meetings with him as “fishing expeditions” to pry confidential information out of him.

McDonnell did not enter any evidence into the case and focused his defense on challenging the legal standing of the CFTC to bring the enforcement action against him, an argument that failed to win Weinstein's favor.

CFTC attorneys David Oakland, Gates Hurand, Kenneth Tomer and Alejandra de Urioste appeared in the case. An agency spokeswoman did not immediately respond to a request for comment.

McDonnell could not be reached for comment.