The prospective client and the hot-shot trader first met over video conference.
The trader boasted of a $4.3 billion portfolio, past success managing a hedgefund in Bermuda, a 100-person team operating from offices in Chicago, Miami, and London, the financial backing of a Kuwaiti sovereign and a well-known owner of a professional sports team, and eye-popping returns that seemed to defy the market.
He even said he had 122 cars — including Ferraris and Lamborghinis — stashed in a fortified warehouse in Florida.
What Philip Galles didn’t know: the interested client he was boasting to was actually a New Jersey-based undercover agent, recording the entire conversation as part of a federal investigation.
Authorities already suspected that Galles, 59, made few legitimate investments and instead ran his firm — Tyche Asset Management — like a Ponzi-like scheme in which he used investors’ money to pay back others and fund his own lavish lifestyle, according to court records.
The Chicagoan was sentenced this week to more than 12 years in prison, followed by five years of supervised release, for his role in the wire and commodities fraud scheme that ultimately defrauded more than 50 victims of more than $4 million, the U.S. Attorney’s Office announced.
Galles began his scheme in late 2019 when started soliciting investments by pitching Tyche as a legitimate commodity futures trading operation promising spectacular returns.
“I can do up to $10 billion managed-wise,” Galles told prospective clients at a 2021 private market investing webinar, according to court records. “After that it gets a little too difficult […] We’re small and nimble, I’m trying to stay under the $10 billion mark.”
In reality, Tyche made virtually no legitimate investments in commodity futures or any other markets. From 2020 through 2022, the firm didn’t make any trades, and the only account that recorded activity in 2023 never held more than about $26,000. (The account statements he sent to investors to conceal the scheme were fake, too.)
In 2022, when two investors deposited a total of $300,000, Galles diverted a sizable portion of the funds to personal expenses, including more than $18,000 in rent for his luxury Chicago apartment, over $14,000 at a jeweler, $6,000 to a Miami luxury car rental service, $19,000 toward a credit card, $9,000 at a bed and mattress store, and $3,200 to his girlfriend.
All together, authorities said he spent about $48,000 renting cars in Florida.
The scheme began to unravel later that year, when several participants requested withdrawals. With insufficient funds to cover the payouts, Galles began making excuses and stalling.
“I ended up putting my property taxes on my credit card,” one investor told Galles in early 2023 according to court records. “3 properties. All together it’s $50k. Thought I would have money weeks ago. Credit cards are at 18% interest. I’m not worried about a wire fee. I just want to get these damn credit cards paid off. Please send money!!!!!!!!!!!!”
Around the same time, the unsuspecting Galles flew from Chicago to New Jersey to meet the undercover agent in person. Even as desperate investors clamored for their money back, he pressed on with his pitch, boasting that his proprietary trading strategies had produced an astonishing 336% return the previous year.
Galles was arrested in May 2023 and later indicted on wire and commodities fraud charges. In April 2025, he pleaded guilty in federal court in Newark, admitting he misled investors and diverted their funds for personal use.
He was ordered to pay $5.3 million in restitution and nearly $16 million in penalties, and he — along with the Tyche entities — is permanently barred from trading.
Attorneys for Galles didn’t respond to a request for comment.
