ST. LOUIS • A self-employed securities trader from Town and Country perpetuated a $2.5 million investment fraud on clients, relatives, neighbors and friends, federal prosecutors said Friday.
Grahame E. Rhodes, 61, promised high rates of return, prosecutors said, but made few investments and earned little or no money on those investments. On “many” occasions, he used the money for personal expenses, prosecutors said.
Some existing investors got some “profits,” but the money was actually funds from new investors, prosecutors said. Rhodes lied to clients by claiming to have investing their money and inventing false excuses to delay their requests for withdrawals, they said.
Rhodes was indicted Thursday for wire fraud but the indictment was sealed until his arrest Friday morning. He could not be immediately reached for comment.