A Cincinnati man has pleaded guilty to charges that he masterminded a forex-based Ponzi scheme that raised at least $8.7 million from friends, acquaintances, and even members of a church group. John R. Bullar, 52, pleaded guilty today in an Ohio federal court to one count of wire fraud and one count of money laundering. Each of tne charges carries a maximum 20-year prison term as well as criminal monetary penalties. In a parallel action filed by the U.S. Commodity Futures Trading Commission, Bullar and his company were also charged with violations of federal commodities laws.
Bullar owned and operated Executive Management Advisors ("EMA"), which he represented to potential investors as a successful commodities-trading firm. Bullar told investors that their funds would be used to trade commodity futures and commodities options, touting himself as an experienced futures trader with significant experience with trading floors at the Chicago Board of Trade and the Chicago Mercantile Exchange. Investors received regular account statements showing purported profits that they understood were derived from trading profits. In total, nearly $9 million was raised from investors that included Bullar's friends and members of a church group.
However, of the millions of dollars raised by Bullar, only a fraction was used to trade commodities futures and options as promised. Indeed, of the approximately $786,000 deposited in his trading account, Bullar lost more than $230,000 in the form of trading losses and fees. Of the remaining millions of dollars in investor funds, Bullar misappropriated or embezzled approximately $6 million for his own use, including the payment of personal expenses, cash withdrawals, the purchase of property and vehicles, and for landscaping and other home improvements. Additionally, Bullar used investor funds to pay "returns" to existing investors - a classic hallmark of a Ponzi scheme.
The scheme ultimately collapsed in 2013 after Bullar was unable to satisfy investor redemptions. While one investor had requested the redemption of their $1.5 million investment to close on a real estate transaction, Bullar admitted to that investor that he was unable to satisfy that request due to his operation of a fraudulent investment scheme. Bullar later admitted the same to another investor, and indicated he knew he would be going to prison for the fraud.
The CFTC complaint against Bullar is below: