Iowa Man Pleads Guilty to Fraud Charge for Role in Crude Oil Futures Trading Scheme
An Iowa man pleaded guilty today to a fraud charge for his role in a crude oil futures trading scheme, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group in Washington.
Lon Olen Friedrichsen, 61, of Alton, Iowa, pleaded guilty to one count of wire fraud before U.S. Magistrate Judge Kelly K.E. Mahoney of the Northern District of Iowa. Sentencing has been not yet been scheduled.
As part of his guilty plea, Friedrichsen admitted that he solicited victims on Craigslist by falsely advertising himself as an experienced and successful trader handling millions of dollars in investor funds. In fact, Friedrichsen had no such experience; he was not handling millions of dollars in funds; and regularly incurred massive losses in victims’ accounts, he admitted. In furtherance of his scheme, Friedrichsen repeatedly sent victims account performance records showing tens of thousands of dollars in profits. Friedichsen admitted that these records were in fact from practice accounts and that he sent these emails intending that the victims believe that the practice accounts were actual trading accounts.
Friedrichsen further admitted that, as a result of these misrepresentations, he induced victims to enter into agreements obligating them to open trading accounts that the victims were to fund with thousands of dollars. Victims would then provide Friedrichsen with login credentials so he could access the accounts and agreed to split any profits with Friedrichsen. Friedrichsen, however, took risky positions that resulted in investors incurring losses of hundreds of thousands of dollars, at which point Friedrichsen disappeared and refused to engage in further communications with investors. Friedrichsen admitted to causing approximately 40 victims to incur losses exceeding $550,000.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorneys Michelle Pascucci and Kevin Mahne of the Criminal Division’s Fraud Section are prosecuting the case. The Commodity Futures Trading Commission provided assistance in this case.
The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.