Minnesota Man Arrested in Connection with Ponzi Scheme
WASHINGTON – A Minnesota man was arrested today on charges related to an alleged Ponzi scheme involving commodity pools, Acting Assistant Attorney General Rita M. Glavin for the Criminal Division and U.S. Attorney Frank J. Magill for the District of Minnesota announced.
Charles "Chuck" E. Hays, of Rosemount, Minn., was charged in a criminal complaint filed in the District of Minnesota with one count of wire fraud and one count of mail fraud. According to the complaint, Hays allegedly induced investors to provide funds to Crossfire Trading, LLC (Crossfire), a company for which the listed operating address was the same as Hays’ residence.
According to the complaint, Hays allegedly told investors their money had been invested in a "pooled" commodities trading account, using misrepresentations such as false statements from a commodities brokerage firm, when in reality no such investments were ever made. The complaint alleges that Crossfire had no commodities trading account and the documents shown and sent to victim investors were fabrications. The complaint also alleges that Hays used the money wired to his bank accounts by investors for his personal expenses, including the purchase of an approximately $3 million yacht, as well as for payments to other investors.
Hays is scheduled to appear today before a magistrate judge for the U.S. District Court for the District of Minnesota.
Additionally, the government has seized the yacht Hays purchased with investor funds as well as bank accounts, which contain approximately $1 million in funds allegedly obtained through the fraudulent scheme.
In a related action, the U.S. Commodity Futures Trading Commission today filed a civil enforcement action against Hays and Crossfire.
A complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant Chief Robertson Park and Trial Attorney Laura Perkins of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ann Anaya for the District of Minnesota. Significant assistance is also being provided by Assistant U.S. Attorney Jim Alexander for the District of Minnesota. The case is being investigated by the U.S. Postal Inspection Service.