Connecticut Man Charged In Manhattan Federal Court With Misappropriation Of Over $1 Million From Investors In Commodity Pool
Commodity Pool Managing Partner Sent Investors Fake Account Statements
Preet Bharara, the United States Attorney for the Southern District of New York, and George Venizelos, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), today announced the arrest of RYAN TOMAZIN, a founder and managing partner of R2 Capital Group LLC (“R2 Capital”), in connection with the unsealing of a two-count Indictment charging TOMAZIN with defrauding investors and misappropriating investment funds. Beginning in late 2009, TOMAZIN solicited over one million dollars from investors for investment in a commodity pool. From late 2009 through December 2014, TOMAZIN defrauded investors by disseminating, or causing others to disseminate, documents containing false representations regarding how assets in the commodity pool would be managed, and by falsely informing investors that their investments were increasing in value when, in fact, their investments had declined in value precipitously. As a further part of the scheme, TOMAZIN and other principals at R2 Capital caused over $850,000 of investors’ funds to be withdrawn from bank accounts associated with the commodity pool, and directed to bank accounts held in TOMAZIN’s and other principals’ own names or those of their respective holding companies for no legitimate purpose.
TOMAZIN was arrested by the FBI this morning at his residence in Connecticut, and will be presented in federal court in the Southern District of New York this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Ryan Tomazin misled investors about the commodity pool he ran, and then misappropriated their money. With today’s arrest, he will now be brought to justice for this fraud.”
FBI Assistant Director-in-Charge George Venizelos said: “Once again we see greed and unethical behavior by those we trust with our investments. As alleged in the indictment, Mr. TOMAZIN defrauded investors, misappropriated their investment funds for his own personal benefit and then made false representations to cover his unethical scheme. Today’s arrest is another example of our continued commitment to work with our partners to expose and prosecute such criminal activity.”
According to the allegations in the Indictment unsealed today in Manhattan federal court:
R2 Capital began operations as an investment firm in 2008. In late 2009, R2 Capital created a commodity pool, R2 Capital Partners I L.P. (the “Commercial Pool”) and began to solicit investors, eventually raising approximately $2.2 million. In early 2010, R2 Capital engaged in trading on behalf of the Commercial Pool, but experienced significant losses and ceased all trading activity in or about July 2011. By August 2011, there was less than $5,000 remaining in bank accounts associated with the Commercial Pool.
In early 2010, TOMAZIN solicited a potential investor in the Commercial Pool (“Investment Fund-1”) and provided Investment Fund-1 with documentation that stated, among other things, that R2 Capital would receive a management fee limited to 50% of the profits earned by the Commercial Pool. Investment Fund-1 invested over $1 million in the Commercial Pool. From June 2010 to July 2011, the Commercial Pool experienced significant net losses. In July 2011, all trading activity in the Commercial Pool ceased. Nonetheless, between August 2011 and March 2013, TOMAZIN caused false “Trading Statements” to be sent to Investment Fund-1 reflecting false purported monthly trading profits and inaccurate trade balances. Furthermore, contrary to prior representations that R2 Capital’s management fee would be limited to 50% of profits earned, TOMAZIN and other principals at R2 Capital caused approximately $850,000 to be withdrawn from bank accounts associated with the Commercial Pool for their own personal benefit.
TOMAZIN, 39, of Stamford, Connecticut, is charged in the Indictment with securities fraud (Count One) and commodities fraud (Count Two). The securities fraud charge carries a maximum term of 20 years in prison and the commodities fraud charge carries a maximum term of 10 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
In a separate action, the United States Commodities Futures Trading Commission (“CFTC”) previously sued TOMAZIN, two others, and R2 Capital, in an action filed in United States District Court for the District of Colorado.
Mr. Bharara praised the investigative work of the FBI. He also thanked the CFTC for its assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Harry Chernoff and Aimee Hector are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.