The Russian national and Florida resident Peter Kambolin was the CEO of Systematic Alpha Management LLC (SAM). He has been sentenced to two years in prison followed by one year and six months of home confinement. Additionally, he has been ordered to forfeit approximately $1.6 million for his involvement in a “cherry-picking” scheme. This case marks the first criminal charge against a commodities trading advisor and commodities pool operator for engaging in such a scheme involving cryptocurrency futures contracts.
Background of the Case
Peter Kambolin, aged 48, was SAM’s owner and chief executive officer, an investment firm he marketed as specializing in algorithmic trading strategies involving futures contracts. By 2011, SAM managed over $720 million in assets. Between January 2019 and November 2021, Kambolin, acting as a commodity trading advisor and a commodity pool operator, orchestrated a cherry-picking scheme. He fraudulently allocated profits and losses from futures trades to benefit his own accounts unfairly, resulting in losses for his investors.
Misrepresentation and Fraudulent Activities
Kambolin misrepresented to his clients that SAM‘s trading strategies were focused on crypto futures and foreign exchange futures contracts. However, in reality, about half of his trading involved equity index futures contracts. This deception defrauded investors in the U.S. and abroad, depriving them of profitable trades. Kambolin used the proceeds from this scheme for personal expenses, including beachfront apartment rent, and transferred funds to foreign bank accounts in Belarus and Dominica controlled by his co-conspirator.
The Sentencing and Guilty Plea
Kambolin pleaded guilty on October 11, 2023, to one count of conspiracy to commit commodities fraud. His sentencing includes a 2-year imprisonment, followed by one year and six months of home confinement and ordered to forfeit approximately $1.6 million
The sentencing was announced by Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division and Assistant Inspector General for Investigations Shimon R. Richmond of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG).
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