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A Richmond man pleaded guilty Thursday to mail fraud and acting as an unregistered commodity pool operator in a scheme that took in at least $7 million from more than 30 investors.

Leonard J. Cipolla, 71, owned and operated Tate Street Trading Inc. between 2009 and 2019, and solicited money from investors in Virginia, New York and Washington, D.C., telling them that he was an experienced and successful trader in commodity futures and options.

Authorities said investors place their money in commodity trading pools to trade futures as a group, enabling them to make investments they might not do alone and to minimize risk.

A pool operator solicits money from others to make trades on futures contracts. Pool operators are required to be registered with the Commodity Futures Trading Commission. Cipolla was not registered.

Cipolla promised investors that he could guarantee significant fixed rates of return and that his fee would be taken only from the profits made over and above each investor’s promised rate of return.

He also told investors that he was qualified to manage tax-deferred retirement accounts, and that he would roll the investor’s existing individual retirement account into a managed, tax-deferred IRA. Cipolla provided many investors with account statements that purported to show the investor’s principal was safely intact and growing at the promised rate of return.

But Cipolla used only a fraction of the investment money to trade in the futures market and lost nearly the entire amount that he actually invested. He used the remainder of his investors’ money on unauthorized expenses, including making payments to earlier investors and paying his own personal expenses.

Cipolla faces up to 20 years in prison when sentenced by U.S. District Judge John A. Gibney Jr. on Jan. 28. Court papers indicate Cipolla was allowed to remain free pending sentencing; he is to be on home detention and electronic monitoring.

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