Former Commodities Trader Charged with Causing $5 Million Loss to Bank and Others in Alleged $10 Million Fraud Scheme
|U.S. Attorney’s Office August 28, 2013|
CHICAGO―A former Chicago commodities trader was charged today with allegedly fraudulently raising more than $10 million and misappropriating a substantial portion of the money for his personal commodities futures trading to make Ponzi-type payments to investors and to benefit himself and his family, resulting in a loss of at least $5 million. The defendant, Bradley Schiller, allegedly used some of the funds to pay for personal and family expenses, including a Range Rover, jewelry, condominium fees, housing rental fees for his mother-in-law, and country club fees.
Schiller, 37, of Chicago, was charged with three counts of wire fraud in an information filed today in U.S. District Court. He will be arraigned on a date to be determined.
According to the charges, Schiller, who represented himself as a successful commodities future trader, raised more than $10 million between 2007 and 2012 from various sources, including The PrivateBank and Trust Company, in connection with his futures trading. In raising the funds, Schiller allegedly lied to sources and prospective providers of funds about the profitability of his futures trading, the use of money he raised, the risks involved in providing him with money, his financial condition, and the status of the funds. He misappropriated a substantial portion of the money raised and concealed the scheme by making Ponzi-type payments to victims and by creating and distributing fraudulent documents, including phony commodities brokerage and bank account statements, false financial statements, and false tax forms, the charges allege. During the scheme, Schiller had trading losses of more than $1.5 million and need to continually raise new funds to repay earlier providers of funds.
In obtaining a $2 million line of credit from The PrivateBank, for example, Schiller allegedly falsely represented that he had a net worth of about $2.6 million and an overall balance in his commodities accounts in April 2009 of approximately $5.5 million. Schiller allegedly knew, however, that he had a negative net worth at the time and his overall balance in his commodities accounts was nearly zero.
The charges were announced by Gary S. Shapiro, Acting United States Attorney for the Northern District of Illinois, and Robert J. Shields, Jr., Acting Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The Commodity Futures Trading Commission provided assistance.
Each count of wire fraud affecting a financial institution carries a maximum penalty of 30 years in prison and a $1 million fine, or an alternative fine totaling twice the gross gain or twice the loss, whichever is greater, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines. An information contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is being represented by Assistant U.S. Attorney Edward Kohler.
The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.stopfraud.gov.