A former Chicago commodities trader was arrested and charged with fraud for lying to clients about everything from a nonexistent collection of 122 luxury cars to phony returns that exceeded 200%.
Phillip Galles, 57, was charged in a criminal complaint unsealed Thursday with a single count of wire fraud for allegedly stealing more than $2 million from victims whose money he falsely claimed he was investing in commodity futures, according to a statement by New Jersey U.S. Attorney Philip Sellinger.
Prosecutors say Galles made almost no investments of any kind. Instead, he was running his firm as a Ponzi scheme, using the money to pay off early investors and for his own personal expenses, according to the government.
Galles appeared in court in Chicago and remains in custody, according to Sellinger's office. A lawyer for Galles could not be located for comment.
Picassos and Chagalls
The Commodity Futures Trading Commission also sued Galles on Thursday in Chicago federal court. According to the regulator, he told prospective clients that his firm, Tyche Asset Management, was heavily staffed with former Goldman Sachs Group Inc. employees, and had "in the US $275 million under management, and $1.7 billion offshore."
Galles allegedly claimed a "well-known owner of a professional sports team," who is not identified in court papers, and a Kuwaiti sovereign-wealth fund were interested in investing with Tyche. He said annual returns were as high as 363.29%, according to the government.