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Press Release

Former Commodities Trader Charged with Multimillion-Dollar Wire and Commodoties Fraud Scheme

For Immediate Release
U.S. Attorney's Office, District of New Jersey

NEWARK, N.J. –  A Chicago man was charged today in a fraud scheme that defrauding victims of over $3.7 million, U.S. Attorney Philip R. Sellinger announced.

Phillip Galles, 57, is charged by indictment with one count each of wire fraud and commodities fraud.

“As alleged, Phillip Galles defrauded multiple victims by falsely posing as a successful hedge fund manager who would invest their money in commodity futures through his Chicago-based investment company Tyche Asset Management,” U.S. Attorney Sellinger said. “In reality, Galles made virtually no real investments, spent time working as a dog walker and not a fund manager, and misappropriated over $3.7 million in victims’ money. We will continue to work relentlessly to pursue those who prey on investors through lies and deception.”

U.S. Attorney Philip R. Sellinger

According to documents filed in this case and statements made in court:

Galles, a former commodities trader, defrauded his victims by falsely claiming that he would invest their money in commodity futures through his purported investment company called Tyche Asset Management, based in Chicago. As part of the scheme, Galles and those working for him falsely told prospective investors that Tyche had a history of success using proprietary trading strategies, with extraordinary annual rates of return exceeding 100 percent. In reality, Tyche made virtually no legitimate investments in commodity futures or otherwise.  Galles instead ran Tyche like a Ponzi scheme and used investor money to pay back other investors and for his own personal expenses.

Galles met with an undercover agent in New Jersey purporting to be an investment manager looking to make a large investment. Galles repeatedly lied during those meetings about Tyche and his own personal history. He falsely claimed that Tyche had annual returns of 336 percent, raised over $2 billion within 60 days of starting the fund, and had prominent investors, including a Kuwaiti sovereign fund and a well-known owner of a professional sports team. Galles also falsely claimed that he graduated from a prominent university in the Midwest. In total, Galles defrauded more than a dozen victims of more than $3.7 million.

The counts with which Galles is charged are each punishable by a maximum of 20 years in prison and a fine of $250,000 or twice the gross gain or loss involved in the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney in Newark, and postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Christopher A. Nielsen, Philadelphia Division, with the investigation leading to the charges. He also expressed appreciation to the Commodity Futures Trading Commission and the National Futures Association.

The government is represented by Assistant U.S. Attorney Carolyn Silane of the Economic Crimes Unit in Newark.

The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Updated February 20, 2024

Securities, Commodities, & Investment Fraud
Press Release Number: 24-061