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Local securities trader indicted on $2.5 million fraud scheme

FOR IMMEDIATE RELEASE
July 20, 2012

St. Louis, MO - Grahame E. Rhodes was indicted involving an investment fraud scheme of approximately $2.5 million beginning in1995 through 2011.

According to the indictment, Rhodes was a self-employed futures securities trader who solicited clients/investors, mainly family members, neighbors and friends, by promising them high rates of returns on their investments. The indictment alleges that despite his promises, his investments were minimal and earned little or no return of income. He returned some money to investors representing it to be profits, but it was actually money from new investors. Rhodes allegedly told them he had invested their money when he had not, and delayed requests for withdrawal of their money by creating false excuses to justify the delay. The indictment states that on many occasions he converted the money for his own personal use.

GRAHAME E. RHODES, Town & Country, MO, was indicted by a federal grand jury July 19 on one felony count of wire fraud. The indictment remained sealed until the arrest of the defendant earlier today.

If convicted, wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000. In determining the actual sentences, a Judge is required to consider the U.S. Sentencing Guidelines, which provide recommended sentencing ranges.

This case was investigated by the Federal Bureau of Investigation and the Commodity Futures Trading Commission. First Assistant United States Attorney Michael W. Reap is handling the case for the U.S. Attorney’s Office.

As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

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