A Chicago man has been charged with defrauding clients out of at least $1.5 million by pocketing their money for personal expenses instead of investing it.
Randall Rye, 26, who owns Faster Than Light Trading LLC, told investors they could earn large profits from his proprietary trading program, according to a statement from the U.S. attorney’s office.
He claimed he would invest their money using a computer algorithm but instead misappropriated their funds for personal expenses, including air and hotel travel costs for vacations to St. Lucia and Bali; tickets to sporting events, including the World Series and the Masters golf tournament; and on other luxury items and large cash withdrawals, the U.S. attorney’s office said.
Rye would tell investors he was generating substantial returns from their money, the U.S. attorney’s office said. He would send them false account statements that appeared to be from established financial companies, stating all of the investors’ principal and profits were invested and profitable.
He also used newer investors’ funds to make Ponzi-type payments to his earlier investors, according to the statement. He was arrested last month and remains in federal custody.
Rye, of Chicago, was charged Wednesday with six counts of wire fraud, according to the U.S. attorney’s office. His arraignment is scheduled for March 21.