Harris Bruce Landgarten of Old Brookville, New York, is facing both civil and criminal charges for defrauding investors in the Tradeanedge Members Fund (TMF), a commodity pool he operated. The Commodity Futures Trading Commission (CFTC) filed a civil enforcement action in the U.S. District Court for the Eastern District of New York on July 2, 2018, alleging Landgarten misled participants and misappropriated funds.
Simultaneously, the U.S. Attorney’s Office for the Eastern District of New York filed a related criminal action, charging Landgarten with commodity fraud, wire fraud, and obstruction of a CFTC investigation. The obstruction charge stems from Landgarten’s alleged attempts to influence a potential witness while the CFTC probe was ongoing.
According to the CFTC’s complaint, from at least July 2014 through March 2017, Landgarten allegedly reimbursed himself from TMF’s bank account for expenses without disclosing these withdrawals to investors. He then provided account statements that only reflected trading gains, losses, and management fees, concealing the personal reimbursements. When one investor attempted to withdraw funds, Landgarten reportedly couldn’t fulfill the request due to insufficient funds in the account.
The CFTC further alleges Landgarten’s record-keeping was inadequate, leading to instances where he withdrew more money than the claimed expenses, effectively commingling pool funds with his personal finances. The agency seeks full restitution for defrauded customers, disgorgement of any ill-gotten gains, civil monetary penalties, permanent trading bans, and a permanent injunction against further violations of commodity laws.
The CFTC acknowledged the cooperation of the U.S. Attorney’s Office for the Eastern District of New York and the United States Postal Inspection Service in the investigation. The case is being led by CFTC staff members Gabriella Geanuleas, Trevor Kokal, David Acevedo, Lenel Hickson, Jr., and Manal M. Sultan.
Source: CFTC.gov
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