The U.S. Commodity Futures Trading Commission sued Harris Bruce Landgarten and his company Tradeanedge Members Fund (TMF), accusing the New York-based resident of misappropriating at least $150,000 and issuing misleading account statements to conceal fraud.
In a complaint filed in a federal court in Brooklyn, New York, the US regulator said Landgarten had operated an alleged fraudulent scheme between July 2014 and March 2017. He collected the funds from three investors, telling them their capital would be pooled and invested in trading products including stocks.
Instead, Landgarten allegedly made Ponzi-style payments to the commodity pool participants from other victims’’ funds and misappropriated pool funds. According to court papers, he spent the money on his personal expenses such as “a home security alarm, cable television and internet service, cell phone, online book subscription” and monthly payments to himself.
The CFTC also charged TMF and its principle with wire fraud, misappropriation, and issuing false account statements in connection with solicited investments. The defendant and his firm also never registered with the CFTC as an Associated Person of a Commodity Pool Operator and as a CPO.
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As part of this unlawful conduct, Landgarten introduced false statements that hid the fact that he spent more than $100,000 of the pool participant funds to which it had no legitimate interest or entitlement, the CFTC said.
Landgarten was arrested on Saturday, and if convicted of these charges, he faces a maximum sentence of 25 years’ imprisonment.
The CFTC’s complaint seeks civil fines, restitution, an accounting of assets and liabilities, and other remedies.
The CFTC statement further states: “Mr. Landgarten devised an audacious scheme to swindle his clients who placed their trust in him, then further victimized an investor by allegedly only returning funds if a complaint against him was withdrawn, a classic case of greed to fund his own personal lifestyle. Postal Inspectors will never tolerate abuse of the public trust, and will bring those to justice who violate the laws that protect the investing public.”