An investment firm CEO was sentenced today to two years in prison, followed by one year and six months of home confinement and the forfeiture of approximately $1.6 million for a “selective targeting” scheme in which He fraudulently appropriated profitable operations for himself and charged his investors with losses.
According to court documents, Peter Kabolin, 48, a Russian-American citizen from Sunny Isles Beach, Florida, was the owner and CEO of Systematic Alpha Management LLC (SAM), an investment firm that Kabolin marketed by offering algorithmic trading strategies involving futures contracts. Founded in 2007, as of 2011, SAM had more than $720 million in assets under management. Between January 2019 and November 2021, Kabolin, who at the time was a commodities trading advisor and commodity pool trader, engaged in a targeting scheme in which he fraudulently allocated trading profits and losses. futures in a way designed to benefit their own interests. accounts unfairly at the expense of their clients. Kabolin also misrepresented to its clients that SAM employed trading strategies focused on cryptocurrency futures contracts and currency futures contracts, when in reality, approximately half of Kabolin's trades in each group involved stock index futures contracts. In doing so, Kabolin defrauded investors located in the United States and abroad by, among other things, depriving them of profitable operations. Kabolin used the proceeds from the scheme to fund personal expenses, including renting a beachfront apartment, and transferred the proceeds to foreign bank accounts his accomplice controlled in Belarus and Dominica.
During the relevant period, Kabolin executed trades for pool participants alongside trades he executed on behalf of his own accounts, and fraudulently allocated profits and losses from the trades to the benefit of his own accounts.
Kabolin pleaded guilty on October 11, 2023 to one count of conspiracy to commit commodity fraud.
Acting Deputy Attorney General Nicole M. Argentieri of the Department of Justice's Criminal Division and Deputy Inspector General for Investigations Shimon R. Richmond of the Federal Deposit Insurance Corporation's Office of Inspector General (FDIC-OIG) made the announcement .
The FDIC-OIG investigated the case. The Commodity Futures Trading Commission previously charged Kabolin and SAM by complaint.
Trial Attorney Matt Kahn of the Criminal Division's Fraud Section handled the case.
