(credit: Wikipedia) The alleged scheme entailed traders misappropriating material, nonpublic information and to use that information to engage in fraudulent, pre-arranged trades in natural gas futures contracts
By Gary Raynaldo DIPLOMATIC TIMES
A former natural gas trader pleaded guilty Monday to conspiracy to commit commodities fraud and wire fraud for his role in an insider trading scheme that generated approximately $966,403 in illicit proceeds, the U.S. Department of Justice announced. John Ed James, 51, of Katy, Texas, pleaded guilty to one count of conspiracy to commit commodities fraud and wire fraud before U.S. District Judge Vanessa Gilmore of the Southern District of Texas, according to the DOJ. Sentencing has been scheduled for April 26, 2021, before Judge Gilmore.
“When individuals engage in deceptive trade practices and manipulate the commodities market for their personal gain, they undermine the public’s confidence in the U.S. markets and stack the deck against other traders and investors. The department and our law enforcement partners will continue to pursue and prosecute those who engage in such activity.”
-Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division
As part of his guilty plea, James admitted that he conspired with others to misappropriate material, nonpublic information and to use that information to engage in fraudulent, pre-arranged trades in natural gas futures contracts. These pre-arranged trades generated nearly $1,000,000 in illicit proceeds.
“Commodities fraud and insider trading undermine the integrity of the markets, in this case the energy market which plays a key role in the Houston area economy. The FBI will continue to combat criminal violations of the commodities laws to eliminate unscrupulous activity and protect market participants so that the public will continue to have trust in the system.”
-Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office.
James further admitted that the net profits from these fraudulent trades were split between himself and others involved in the fraudulent trading scheme. James also admitted that he and others agreed to falsely document certain proceeds as income on IRS forms in part to conceal the true nature of the funds and to make the illicit profits appear to be legitimate income paid.
The case is the result of an ongoing investigation by the FBI’s Houston Field Office and the IRS-CI’s Houston Field Office, according to the DOJ. Trial Attorneys Jennifer Farer, Drew Bradylyons, and Della Sentilles of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Suzanne Elmilady of the Southern District of Houston are prosecuting the case.
