Commodities Trader Pleads Guilty to $4 Million Fraud Scheme Involving Fake Investment Fund

Chicago man defrauded investors with false claims of extraordinary returns, spent funds on luxury lifestyle instead of legitimate trades

NEWARK — Philip Galles, 59, of Chicago, Illinois, pleaded guilty in Newark federal court to orchestrating a wire and commodities fraud scheme that defrauded investors of more than $4 million, U.S. Attorney Alina Habba announced.

Appearing before U.S. District Judge Esther Salas, Galles admitted to both counts of an indictment charging him with wire fraud and commodities fraud. The sentencing is scheduled for September 23, 2025.

According to court documents and statements made in court, Galles operated a fraudulent investment operation through a company he called Tyche Asset Management, which he claimed specialized in commodity futures trading. He marketed Tyche as a successful firm employing proprietary strategies that generated exceptional annual returns—allegedly more than 100%.

In reality, Galles made few, if any, legitimate investments. Prosecutors say he used new investor funds to pay earlier investors in a Ponzi-like arrangement and used the remaining money for personal expenses, including rent on a luxury apartment, designer clothing, and high-end automobiles.

During the investigation, Galles met with an undercover agent in New Jersey who posed as a prospective investor. In those meetings, Galles falsely claimed that Tyche had achieved 336% annual returns, raised over $2 billion in its first 60 days, and attracted investments from prominent entities, including a Kuwaiti sovereign fund and a professional sports team owner. He also misrepresented his academic background.

More than a dozen victims were misled by Galles' false claims, resulting in financial losses exceeding $4 million.

The wire fraud charge carries a maximum penalty of 20 years in prison, while the commodities fraud charge carries a maximum of 25 years. Each charge also includes a potential fine of $250,000 or twice the amount of the financial loss, whichever is greater.

The investigation was conducted by the U.S. Attorney’s Office, the U.S. Postal Inspection Service, the Commodity Futures Trading Commission, and the National Futures Association.

The case is being prosecuted by Assistant U.S. Attorneys Carolyn Silane of the Economic Crimes Unit and Andrew Kogan of the Cybercrime Unit, both based in Newark.