By: Richard L. Smith
Phillip Galles, a 57-year-old Chicago resident, has been charged with wire fraud and commodities fraud in a scheme that defrauded victims of over $3.7 million, as announced by U.S. Attorney Philip R. Sellinger.
Galles, who operated under the guise of a successful hedge fund manager through his company, Tyche Asset Management, is accused of running a Ponzi scheme and using investor funds for personal expenses.
According to court documents and statements, Galles, a former commodities trader, deceived investors by claiming he would invest their money in commodity futures with high rates of return.
He boasted of extraordinary annual returns exceeding 100 percent and notable investors, including a Kuwaiti sovereign fund and a professional sports team owner.
However, Tyche Asset Management made virtually no legitimate investments.
The investigation revealed that Galles spent his time as a dog walker rather than managing funds.
He was caught in his deceit during meetings with an undercover agent in New Jersey, where he lied about his personal history, including claiming to be a graduate of a prestigious Midwestern university.
Galles defrauded over a dozen victims, amounting to more than $3.7 million.
Galles faces a maximum sentence of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense, whichever is higher, for each count he is charged with.
This case highlights the ongoing efforts of law enforcement to pursue and prosecute those who engage in financial fraud and deception.