An Anchorage man is accused of defrauding $25 million from 130 people who believed he was successfully investing their funds, a federal charge says.
The Alaska Division of Banking and Securities issued a series of cease and desist orders to 30-year-old Garrett Elder beginning in October and ordered him to pay a nearly $1.8 million fine for defrauding clients through his business, Tycoon Trading LLC. He was also ordered to pay back his clients with interest. Elder was not registered as an investment adviser, the division wrote in a statement.
The scheme largely victimized Elder’s family members and friends, the statement said.
Elder’s parents gave him between $10,000 and $20,000 to invest in stocks and foreign currencies during 2016, according to the charge filed in the case by federal prosecutors. Elder deposited the money into Tycoon Trading, the charge said, and he lost all of the funds while trading on financial markets.
“Despite the losses, (Elder) told his family, friends and others about his trading business, and some expressed an interest in giving him money to invest,” the charge said. “(Elder) did not tell these potential investors that he had lost the money provided by his parents. Instead, (Elder) gave these victims the false impression that he was a successful trader.”
According to a civil lawsuit filed against Elder in October, he told clients they could see up to 32% returns on their investments.
By 2018, Elder had received $500,000 to invest on behalf of his clients, the charge said. Again, Elder lost the money, the charge said, but he provided investors with falsified performance reports that showed they were earning money.
Elder had only $10,000 to $15,000 left in the trading account by March, and the charge said he told clients their investments had failed. He did not tell them he had falsified the reports, the charge said.
Elder continued to solicit new clients and told them he was a successful trader, the charge said. By the end of 2018, the charge said he had 30 new investors who were investing more money than the original clientele. Elder created an additional trading entity in 2019 called The Daily Bread Fund LLC, and the charge said he continued to solicit investors and lose their money.
Elder also used some of the money to buy real estate, vehicles, a boat, a camper, bicycles, tools and jewelry, the charge said.
In total, Elder had accepted between $30 million and $34 million from his clients, federal prosecutors wrote in a statement. He returned funds to select investors, prosecutors said, but by October 2022 he had lost roughly $25 million.
From 2020 until 2022, Elder had accepted more than $1.1 million from a couple he was close friends with, according to a civil lawsuit the couple has since filed against him. He called them in October and told them their money was gone and he had falsified reports, according to the complaint.
Another civil lawsuit was filed against Elder in January.
He was charged with wire fraud Monday. Assistant Federal Defender Ben Muse is representing Elder and declined to comment on the case Tuesday.