Commodity Pool Operator Indicted for Defrauding Investors and Attempting to Obstruct Justice
Defendant Allegedly Used Investors’ Funds for Personal Expenses
A four-count indictment was unsealed today in federal court in Brooklyn, New York, charging commodity pool operator Harris Landgarten with commodities fraud, wire fraud and attempting to obstruct an official proceeding by the Commodity Futures Trading Commission (the “CFTC”) into his fraudulent conduct. Landgarten was arrested on Saturday and is scheduled to be arraigned this afternoon before United States Magistrate Judge Sanket J. Bulsara. If convicted of these charges, Landgarten faces a maximum sentence of 25 years’ imprisonment.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, Peter R. Rendina, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS), and James McDonald, Director, Division of Enforcement, Commodity Futures Trading Commission (CFTC), announced the charges.
“As alleged in the indictment, Landgarten defrauded commodities investors by using their money to pay personal bills, and then compounded his crime by pressuring a victim investor to lie in an attempt to make the investigation go away,” stated United States Attorney Donoghue. “Our message is clear, those who engage in such crimes will be prosecuted to the fullest extent of the law.”
“Mr. Landgarten devised an audacious scheme to swindle his clients who placed their trust in him, then further victimized an investor by allegedly only returning funds if a complaint against him was withdrawn, a classic case of greed to fund his own personal lifestyle,” stated USPIS Inspector-in-Charge Rendina. “Postal Inspectors will never tolerate abuse of the public trust, and will bring those to justice who violate the laws that protect the investing public.”
“As this case shows, the CFTC will work vigilantly to root out fraud from our markets, and we will not be deterred by those who attempt to obstruct our investigations,” stated CFTC Director of Enforcement McDonald. “To ensure both that our markets are protected from fraud and that wrongdoers are held accountable, we will continue to work in parallel with our law enforcement partners, and I am grateful for the work of the United States Attorney’s Office in this case.”
According to court papers, Landgarten operated a commodity pool known as Tradeanedge Members Fund, L.P. The fund’s three investors invested a total of approximately $150,000. From approximately July 2014 to March 2017, Landgarten prepared and sent the investors balance statements that hid the fact that he had spent more than $100,000 of the investors’ money, including on personal expenses such as a home security alarm, cable television and internet service, cell phone, online book subscription and $1,250 monthly payments to himself. After the CFTC initiated an investigation, Landgarten pressured a defrauded investor to submit a false statement to the CFTC and to withdraw the complaint the investor filed with the agency. Landgarten conditioned the return of what remained of the investor’s money upon the investor’s withdrawal of his complaint.
The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being handled by the Office’s Business and Securities Fraud section. Assistant United States Attorney Hiral Mehta is in charge of the prosecution.
Glen Head, New York
E.D.N.Y. Docket No. 18-CR-328 (NGG)