The founder and CEO of Wright Time Capital Group, Michael Wright, pleaded guilty to one count of commodities fraud late Friday, the U.S. Attorney for the Southern District of New York announced.
In June, Wright was accused in United States v. Wright, 17-cr-00459, of luring approximately 10 investors—all family members, friends and acquaintances—into providing him with more than $400,000 to invest in off-exchange foreign currency transactions. According to prosecutors, Wright misrepresented gains he’d secured through similar investing to gain their confidence, claiming to have achieved double-digit gains during the first six months of the fund’s existence.
Wright’s engagement in forex trading was short-lived, according to the complaint. The funds soon were being misappropriated for personal expenses to pay for travel and hotels. Once investors came calling, Wright began operating a Ponzi-like system, using new victim funds to pay back earlier investors.
“Michael Wright used WTCG as his personal piggy bank, issuing fraudulent account statements that covered up the losses WTCG incurred, and ultimately operating WTCG as a Ponzi scheme,” Acting U.S. Attorney Joon Kim said in a statement. “Thanks to the dedicated work of the FBI, Wright will now be held to account for his fraudulent scheme.”
According to the plea agreement, Wright faces up to 10 years in prison, as well as an undetermined money penalty.
Wright’s attorney, Federal Defenders of New York assistant defender Sarah Baumgartel, declined to comment.
Wright also faces parallel civil charges brought by the U.S. Commodity Futures Trading Commission. The CFTC brought four counts of commodities fraud and failure to register charges, among others, against Wright. Baumgartel represents the defendant in the civil suit as well. A hearing was scheduled for Oct. 20, pending the outcome of negotiations in the criminal suit.