Commodity Pool Fraudster Faces Feds' Full Weight - The Industry Spread

Michael Volpe

After spending a decade in finance, Michael Volpe has been a freelance investigative journalist since 2009. His work has been published locally in the Chicago Reader, Chicago Crusader, Chicago Heights Patch, and New City. Nationally, Volpe's work has appeared in a wide variety of publications including the Washington Examiner, the Daily Caller, Crime Magazine, the Southern Christian Leadership Conference Newsletter, and Counter Punch. Volpe has been recognized by whistleblowers as leading the charge in getting their stories out. His first book Prosecutors Gone Wild was published in October 2012, his second book The Definitive Dossier of PTSD in Whistleblowers was published in February 2013 and his third book Bullied to Death was published in August 2015.

CFTC

Commodity Pool Fraudster Faces Feds’ Full Weight

July 8, 2018

A commodity pool operator is facing the full force of the US federal enforcement apparatus.

Harris Landgarten is a commodity pool operator who operated the commodity pool Tradeanedge Members Fund (TMF).

Now the Commodities Futures Trading Commission and the US Attorney’s Office for the Eastern District of New York both announced actions against Landgarten.

The US Attorney’s Office issued a statement including: “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.”

Meanwhile, the CFTC said, “The Commodity Futures Trading Commission (CFTC or Commission) today filed a civil enforcement action in the U.S. District Court for the Eastern District of New York, charging Defendant Harris Bruce Landgarten of Old Brookville, New York, with defrauding participants in a commodity pool that he operated, the Tradeanedge Members Fund (TMF).  The CFTC Complaint also charges Landgarten with providing his pool participants false account statements and with commingling pool funds with non-pool funds.”

“In particular, the CFTC’s Complaint alleges that since at least July 2014 through at least March 2017 (the Relevant Period), Landgarten incurred what he characterized as expenses of TMF for which he reimbursed himself by withdrawals from TMF’s bank account.” The CFTC continued. “According to the Complaint, at no point during the Relevant Period did Landgarten disclose such purported expenses or withdrawals to TMF’s pool participants, either before or after their decisions to invest.  Additionally, the Complaint alleges that Landgarten sent account statements to TMF participants which reflected that the value of each participant’s investment in TMF was affected only by trading gains and losses and Landgarten’s management and incentive fees, but did not indicate that he was incurring any expenses on behalf of TMF or that he was reimbursing himself for such claimed expenses.

“Further, as alleged, when a participant of TMF sought to withdraw his investment, Landgarten failed to honor the request because TMF had less than the amount of the participant’s investment left in its accounts.  The Complaint also alleges that, partly due to Landgarten’s inadequate record keeping practices, on numerous occasions he withdrew more money from TMF than he had incurred in claimed expenses, thus commingling pool funds with non-pool funds.”

“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 Peter 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.”

USPISThe USPIS, or United States Postal Investigative Service, is often involved in securities trading fraud investigations because anything which is fraudulently sent in the mail is considered mail fraud.

As such, bogus statements which often accompany these sorts of fraudulent schemes often turn into potential cases of mail fraud.

As The Industry Spread noted in a previous article, the US Attorney’s Office for the Southern District of New York is the most significant for the trading world because it includes Wall Street.

But the US Attorney’s Office for the Eastern District of New York also has its fair share of trading related crimes because the metropolitan area of New York City and beyond has plenty of trading activity in all directions.

Before becoming the Attorney General under President Obama, Loretta Lynch headed this office.

The US Attorney’s Offices in the Eastern and Southern District are two of ninety-four districts, or regional offices, responsible for prosecuting all federal crimes in their region.

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