Grahame E. Rhodes is accused of masterminding an investment fraud scheme of approximately $2.5 million from 1995 through 2011, according to the U.S. Attorney’s Office for the Eastern District of Missouri and the FBI.
Rhodes was a self-employed futures securities trader who solicited clients and investors by promising them high rates of returns on their investments. Most of his clients were family members, neighbors, and friends. The indictment alleges that despite his promises, his investments were minimal and earned little or no return of income.
He returned some money to investors representing it to be profits, but it was actually money from new investors. Rhodes allegedly told them he had invested their money when he had not, and delayed requests for withdrawal of their money by creating false excuses to justify the delay. The indictment states that on many occasions he converted the money for his own personal use.
A press release from the FBI states that if convicted, wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000.
This case was investigated by the Federal Bureau of Investigation and the Commodity Futures Trading Commission. First Assistant United States Attorney Michael W. Reap is handling the case for the U.S. Attorney’s Office.
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As is always the case, charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.