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Commodities Trader Indicted for $300,000 Ponzi Scheme
A 28-count federal indictment was unsealed in federal court in Brooklyn charging Jeffrey Shalhoub with operating a Ponzi scheme to defraud investors in his unregistered commodities trading pool.
The indictment alleges that Shalhoub solicited his alleged victims to invest money in his company, The 9 Group, Ltd., which purportedly pooled investor money and used the money to trade in the commodities futures markets.
Shalhoub told his investors that they would receive returns of up to 10% of their principal investment every week through his investments in commodities futures. The indictment charges that after he solicited approximately $300,000 of investor money, Shalhoub lost a substantial sum of this money through his trading activities, and misappropriated much of the remaining funds by keeping the money for himself.
The defendant allegedly concealed the theft and losses by sending his investors fraudulent account statements which falsely showed that his investors’ accounts were earning a rate of return of up to 5.2% each week.
Shalhoub was arrested earlier today. He will be arraigned in United States District Court for the Eastern District of New York before United States Magistrate Judge Robert M. Levy.
The case has been assigned to United States District Judge Sterling Johnson, Jr.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service.
As alleged in the indictment, Shalhoub employed fraud and deceit to take advantage of victims who sought to invest in America’s markets. His promises of high returns were all a criminal mirage, propped up by account statements that were no more than fairy tales.
The government’s case is being prosecuted by Assistant United States Attorneys Tyler Smith, David C. Woll, Jr., and Brendan G. King.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.
The Defendant: JEFFREY SHALHOUB, Age: 38, Residence: Staten Island, NY
Criminal Charges: 28-count federal indictment for operating a Ponzi scheme to defraud investors in his unregistered commodities trading pool
City and State: Brooklyn, New York
Exact Date: Today
Sentence or Outcome: Shalhoub was arrested and will be arraigned in federal court
Dollar Amounts: Approximately $300,000
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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