Fraudster of the Week -- Randall Rye, The "Mini-Madoff"
By the C|C Whistleblower Lawyer Team
On Wednesday, a Chicago judge sentenced 26-year-old Randall Rye to nearly six years in prison for what federal prosecutors have called a “mini-Bernie Madoff scam.” Rye, the founder of Faster Than Light Trading LLC, pled guilty in April to one count of wire fraud and admitted to bilking around 20 investors of more than $1.7 million with a fake proprietary trading scheme. He was arrested in February, mere days before he planned to flee to Switzerland.
Rye, a college dropout who told the FBI he’d “read a few books” on the subject of trading, marketed himself as a whiz kid who had developed a trading algorithm certain to reap huge profits. Beginning with his girlfriend and her family, Rye raised $1.72 million to purportedly invest in options and futures. But Rye never actually invested the money, although he did at times pay investors their “returns” by using money obtained from other investors.
Instead of trading, Rye spent his victims’ money on expensive watches, high-end restaurants, luxury travel, and marquee sporting events like the Super Bowl, Masters Golf Tournament, and World Series. He often posted pictures of his lavish lifestyle on social media. On Twitter, Rye posted a selfie with actor Bill Murray in a field-level section at Game 5 of the 2016 World Series. In another photo, Rye appeared on a tropical beach smoking a cigar; the photo’s caption read, “Good morning peasants.”
U.S. District Judge Ronald A. Guzman called Rye’s actions a “mammoth betrayal of trust,” ordering him to pay $1.72 million in restitution and handing down a 70-month prison sentence. Judge Guzman previously rejected Rye’s request for a 36-month sentence. Rye had argued that his fraud was driven by alcohol and drug abuse, but that he never intended to hurt anyone.
Tagged in: Catch of the Week, Ponzi Schemes, Securities Fraud,