Chicago resident Phillip Galles and his network of Tyche entities have been slapped with a hefty penalty and permanent trading ban after being found liable for running a multi-million dollar fraud. The U.S. District Court for the Northern District of Illinois issued a final judgment against Galles and the Tyche companies – Tyche Asset Management LLC, Tyche Master Fund Ltd, Tyche Asset Trade LLC, Tyche Offshore Fund Ltd., Tyche Onshore Fund LP, Tyche PML Master Fund Ltd., Tyche PML Onshore Fund LP, Tyche Onshore Fund GP LLC, and Tyche Asset Trade LLC – resolving a case brought by the Commodity Futures Trading Commission (CFTC) in May 2023.
The court found Galles fraudulently solicited investments for a purported commodity pool, then misappropriated the funds. He also violated CFTC regulations and lied to the National Futures Association (NFA), a self-regulatory body overseeing the derivatives industry. Galles falsely portrayed himself as a successful hedge fund manager with billions under management, claiming Tyche consistently delivered returns exceeding 200% annually through sophisticated trading strategies.
In reality, Galles operated a Ponzi scheme, diverting the vast majority of investor funds to finance a lavish lifestyle and maintain the illusion of wealth. Only a small fraction of the money was actually used for trading commodity futures and options. The scheme defrauded 65 individuals, resulting in losses totaling $5,327,173. Galles and the Tyche entities have been ordered to pay $5,327,173 in restitution to the victims.
Beyond restitution, the court imposed a $15,981,519 penalty and issued a permanent injunction barring Galles and the Tyche entities from trading on CFTC-regulated markets or violating the Commodity Exchange Act (CEA) in the future. The investigation revealed Galles repeatedly lied to the NFA, falsely certifying that Tyche wasn’t actively soliciting funds. He continued these deceptions during an NFA examination in April 2023.
The CFTC warns that recovery of funds for victims isn’t guaranteed, as wrongdoers may lack sufficient assets. Carlin Metzger, Joseph Patrick, David Terrell, Scott Williamson, and Robert Howell of the CFTC’s Division of Enforcement led the investigation. The agency urges the public to verify the registration of firms before investing and to report any suspicious activity.
Source: CFTC.gov
Related Federal Cases
- Eric Holub, Tax Withholding Fraud, Cedar Rapids IA, 2023 · Illinois
- Terry L. Gantt, ID Theft and Wire Fraud, Cedar Rapids IA, 2012 · Illinois
- Abel Hernandez-Labra, Passport Fraud, Hampton IA, 2023 · Illinois
- Princess L. Eatmon, Student Loan Wire Fraud, Albany GA, 2023 · Illinois
- Nicole Bogan, Health Care Fraud, Columbus GA, 2013 · Illinois
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News