Founder And Managing Partner Of Investment Firm Sentenced In Manhattan Federal Court For Securities And Commodities Fraud

Preet Bharara, the United States Attorney for the Southern District of New York, announced that RYAN TOMAZIN, the founder and managing partner of R2 Capital Group LLC (“R2 Capital”), was sentenced today in Manhattan federal court to six months in prison for crimes stemming from his defrauding investors and misappropriating investment funds.  Among other things, TOMAZIN lied to investors in an R2 Capital commodity pool by disseminating, or causing others to disseminate, documents containing false representations regarding how assets in the commodity pool would be managed, and falsely informed investors that their investments were increasing when, in fact, the value was declining.  Furthermore, TOMAZIN and other principals at R2 Capital caused over $850,000 of investors’ funds to be withdrawn from bank accounts associated with the commodity pool and directed to bank accounts held in their own names or those of their respective holding companies.  TOMAZIN, 35, of Stamford, Connecticut, pled guilty on July 30, 2015, and was sentenced today before United States District Judge Paul A. Crotty.

According to the Indictment and other statements made in open court:

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, 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 up to and including July 2011, the Commercial Pool experienced significant net losses.  In July 2011, all trading activity in the Commercial Pool ceased.  By August 2011, there was less than $5,000 remaining in bank accounts associated with the Commercial Pool.  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.

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TOMAZIN was convicted of one count of securities fraud (Count One) and one count of commodities fraud (Count Two).  In addition to the prison term, TOMAZIN was sentenced to three years of supervised release and ordered to pay forfeiture and restitution to the victims of the offense in the amount of $288,000.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established 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 is 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 fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Aimee Hector and Harry A. Chernoff are in charge of the prosecution.