Oil Futures Trader Gets 10 Years For $1.4M Ponzi Scheme
By Matthew Guarnaccia of Law360.com
Texas federal judge on Tuesday sentenced a New York-based oil futures trader to 10 years in prison for orchestrating a Ponzi scheme in relation to his operation commodity pool, which took more than $1.4 million from investors.
U.S. District Judge Lynn Hughes handed down the 120-month sentence to 33-year-old Christopher Donrick Daley, who was convicted of one count of mail fraud and three counts of wire fraud following a two-day jury trial in September. Judge Hughes also ordered Daley to pay $614,950 in restitution. He will serve three years of supervised release after his time in prison.
The U.S. Department of Justice indicted Daley in September 2015, accusing the Bronx, New York, native of operating a fraudulent commodity pool that invested in oil futures contracts. He surrendered to federal authorities more than a month later.
The four-count indictment accused Daley of emailing with investors to entice them to place their funds in the commodity pool. The investors sent the money by mail or wired the funds to Daley through their bank accounts. Between June 2010 and November 2011, Daley received upwards of $1.4 million from investors by promising returns of at least 20 percent per month, the indictment said.
Despite receiving these funds from investors, Daley only invested $195,000, court documents showed. Daley lost all of the money he did invest. In the indictment, the DOJ originally sought $1.5 million in forfeiture from Daley.
Through the course of the Ponzi scheme, Daley maintained that the commodity pool never had a losing month. But at trial, the DOJ proved that Daley paid his investors with other investor funds. He sent monthly statements to investors detailing the success of the commodity pool, which was nonexistent.
The DOJ also proved that he used some of the investor funds to purchase items for personal use, such as a BMW and a Range Rover.
After the verdict, Judge Hughes ordered Daley into custody, where he will remain until he is placed in federal prison.
Counsel for Daley and representatives for the DOJ did not respond Tuesdayto requests for comment.
Daley is represented by Chris Flood of Flood & Flood.
The government is represented by John Braddock and Charles Escher of the U.S. Department of Justice.
The case is USA v. Daley, case number 4:15-cr-00512-1 in the U.S. District Court for the Southern District of Texas.
The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.