A suspended commodities trader from Michigan has pleaded guilty to his role in a $2.7 million fraud scheme and will be sentenced in federal court.
Brian Mitchell, 43, of Ann Arbor, pleaded guilty on Friday to wire fraud, admitting that he defrauded multiple third-party investors, the U.S. Attorney’s Office for the Eastern District of Michigan said. The case involved the entities Young Pros Investment Group and My Nest Egg.
Mitchell acknowledged through his court plea that he caused false representations to be made regarding the security, profitability and use of investor funds, the district attorney’s office said. The scheme included, according to the district attorney’s office, “misrepresentations” that the principal amounts invested were protected from loss.
After significant trading losses occurred, “Mitchell lied to investors about why their investment principal was no longer guaranteed, as he had previously claimed,” the district attorney’s office said.
In the meantime, Mitchell had agreed to a settlement with the Commodity Futures Trading Commission over violations of the Commodity Exchange Act that happened between January 2018 and January 2019. Under that settlement, authorities said Mitchell was barred for three years from engaging in commodity futures trading, including soliciting, receiving, or accepting funds for such activity.
Mitchell failed to disclose that suspension to investors, authorities said.
The district attorney’s office said potential victims of the scheme should contact the Federal Bureau of Investigation, which led the investigation.
Sentencing is set for Oct. 7. Mitchell faces up to 20 years in prison on the charge. As part of the plea agreement in this case, he agreed to pay $2.7 million in restitution.
“The FBI refuses to let scammers get away with perpetually stealing from and betraying hardworking Americans. This scheme caused significant financial harm to investors who placed their trust in the defendant, and today’s guilty plea is another reminder that those who commit these crimes will be held accountable,” said Jennifer Runyan, Special Agent in Charge of the FBI Detroit Field Office.