A fake billionaire hedge fund manager has been arrested after allegedly lying to clients about having a collection of 122 luxury cars and Picasso paintings to con victims out of $2million.
Phillip Galles, 57, also claimed ‘a well known owner of a professional sports team’ and a Kuwaiti sovereign-wealth fund wanted to invest in his fund to drum up interest, court filings say.
He told prospective clients his firm, Tyche Asset Management, could offer annual returns as high as 363 per cent, according to a suit filed by The Commodity Futures Trading Commission (CFTC) in Chicago federal court on Thursday.
Galles, who claims to have studied investment banking at the ‘prestigious’ Northwestern University in Chicago, said Tyche was heavily staffed with former Goldman Sachs employees and at one point had more than 100 members of staff.
In a separate filing in New Jersey, prosecutors say Galles made almost no investments of any kind.
Hedge fund manager Phillip Galles has been accused of lying to investors about his luxury lifestyle to con them out of $2million in what prosecutors say was a ponzi scheme
Galles boasted of his personal wealth and sophistication in public posts on social media
These included claims about his luxury car collection that supposedly included m ultiple Lamborghinis and Ferraris
Instead, he was running his firm as a Ponzi scheme, using the cash to pay off early investors, ‘fund his lavish lifestyle’ and promote his fabricated image of a hedge fund magnate, the Government alleged.
Galles ‘bolstered his pitch’ to prospective clients by ‘cultivating an image’ of wealth and luxury, the CFTC said.
The commission said that – in public posts to Instagram – Galles:
- Boasted about his luxury car collection that supposedly included multiple Lamborghinis and Ferraris’
- Bragged about his luxury homes in Miami, Chicago and Palm Beach’
- Described his high-end watch watch collection alongside photos of Rolex and Longines watches
- Claimed to be hanging art by Picasso and Chagall in one of his homes
- Touted the opening of offices in Chicago, Miami and London in October 2022
Galles also trumpeted his depth of experience and expertise in trading commodities, educational achievements, past success as a manager of a hedge fund based in Bermuda, ‘where he supposedly was responsible for managing a portfolio worth billions of dollars’.
But his ‘claims about his personal and business success are lies’, the filings say.
Galles, who is thought to live in a $15million Chicago apartment, also claimed to have luxury homes in Miami and Palm Beach
His Facebook is littered with pictures of classic cars he claims to own, while he also claims to have attended a prestigious university
His posts also flaunt luxury holidays in destinations across the world
Lawsuits claim he used money from clients to pay off early investors and fund his own lifestyle
Galles described his high-end watch watch collection alongside photos of Rolex and Longines watches
But his ‘claims about his personal and business success are lies’, court filings say
When one alleged victim, a Texas mortgage professional, sent Galles a $100,000 investment, the alleged conman transferred $19,300 for a personal credit card bill, $14,800 to a jewelry store, $10,000 to an earlier investor, $9,000 to a mattress store, $6,000 to a luxury car rental company and $3,200 to his girlfriend, filings say.
Another victim tried to recoup her $190,000 investment, but Galles told her ‘among other things, that he had switched banks, Tyche had been the victim of fraud, banks and wire payments were not working properly, and he was ill,’ the Government says.
Galles, who is thought to live in a $15million Chicago apartment, appeared in court in the city and remains in custody, according to the New Jersey US Attorney’s office.
DailyMail.com has contacted Galles’ office for comment.
