A former Chicago commodities trader was arrested and charged with fraud for lying to clients about everything from a non-existent collection of 122 luxury cars to phony returns that exceeded 200%.
Phillip Galles, 57, was arrested Thursday and charged with a single count of wire fraud for allegedly stealing more than $2 million from victims since 2019, telling them he was investing their money in commodity futures, according to a statement from New Jersey US Attorney Philip Sellinger.
Galles made almost no investments of any kind, according to prosecutors. Instead, he was running his firm as a Ponzi scheme, using the money to pay off early investors and for his own personal expenses, according to the government.
Galles appeared in court in Chicago and remains in custody, according to Sellinger’s office. A lawyer for Galles could not be located for comment.
Galles made grandiose claims, including that his car collection included multiple Lamborghinis and Ferraris, that he lived in luxurious homes in Chicago, Miami and London, and decorated with paintings by Picasso and Chagall, according to a civil complaint filed by the Commodity Futures Trading Commission on Thursday in Chicago.
A “well-known owner of a professional sports team,” who is not identified in court papers, and a Kuwaiti sovereign-wealth fund were interested in investing, he allegedly said. Galles claimed annual returns as high as 363.29%. And he said his firm, Tyche Asset Management, had 30 employees, half of whom were former Goldman Sachs Group Inc. employees, according to the CFTC. A different time he claimed he had more than 100 employees in multiple offices, the regulator said. He allegedly told people he had been valedictorian of a “prestigious US university,” according to the CFTC.
The same day that one alleged victim, a Texas mortgage professional, wired him $100,000 to invest, Galles transferred $19,300 for a personal credit card bill, $14,800 to a jewelry store, $10,000 to an earlier investor, $9,000 to a mattress store, $6,000 to a luxury car rental company and $3,200 to his girlfriend, according to prosecutors.
When one victim tried to redeem $190,000 of her investment, Galles told her “among other things, that he had switched banks, Tyche had been the victim of fraud, banks and wire payments were not working properly, and he was ill,” according to the government.
The cases are US v. Galles, 23-mj-08076, US District Court, District of New Jersey; Commodity Futures Trading Commission v. Galles, 23-cv-02970, US District Court, Northern District of Illinois (Chicago).