A fake billionaire hedge fund manager has been running a Ponzi scheme, the US claims

(Bloomberg) – A former Chicago commodity trader has been arrested and charged with fraud for lying to customers about everything from a nonexistent collection of 122 luxury cars to fake returns that exceeded 200%.

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Phillip Galles, 57, was arrested Thursday and charged with a single count of wire fraud on a single count, according to a statement from New Jersey-based U.S. Attorney Philip, according to Sellinger.

According to prosecutors, Galles made almost no investments of any kind. Instead, he ran his company using a Ponzi scheme, using the money to pay off early investors and cover his own expenses, the government said.

According to Sellinger’s office, Galles appeared in court in Chicago and remains in custody. Galles’ lawyer could not be located for comment.

Galles made grandiose claims, including that his car collection included several Lamborghinis and Ferraris, that he lived in luxurious homes in Chicago, Miami and London, and was decorated with paintings by Picasso and Chagall, according to a civil lawsuit filed by the Commodity Futures Trading Commission Thursday in Chicago.

A “known owner of a professional sports team,” who is not named in the court filings, and a Kuwaiti sovereign wealth fund are interested in investing, he allegedly said. Galles claimed annual returns of up to 363.29%. And he said his firm, Tyche Asset Management, has 30 employees, half of whom are former employees of Goldman Sachs Group Inc., according to the CFTC. Another time he claimed he had more than 100 employees across multiple offices, the regulator said. According to the CFTC, he reportedly told people that he was the valedictory speaker at a “renowned US university.”

The story goes on

On the same day that an alleged victim, a Texas mortgage specialist, wired him $100,000 for an investment, Galles wired $19,300 for a personal credit card bill, $14,800 to a jewelry store, $10,000 to one According to prosecutors, he received a luxury car rental and $3,200 to his girlfriend.

When a victim attempted to repay $190,000 of her investment, Galles told her “among other things that he switched banks, Tyche was a victim of fraud, banks and wire transfers weren’t working properly, and he was ill.” the government.

The cases are US v. Galles, 23-mj-08076, U.S. District Court, District of New Jersey; Commodity Futures Trading Commission v. Galles, 23-cv-02970, United States District Court, Northern District of Illinois (Chicago).

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