Date: February 1, 2021 Contact: newsroom@ci.irs.gov HOUSTON — A former natural gas trader pleaded guilty today to conspiracy to commit commodities fraud and wire fraud for his role in an insider trading scheme. John Ed James pleaded guilty to one count of conspiracy to commit commodities fraud and wire fraud before U.S. District Judge Vanessa Gilmore. Sentencing has been scheduled for April 26. As part of his guilty plea, James admitted he conspired with others to misappropriate material, nonpublic information and to use that information to engage in fraudulent, pre-arranged trades in natural gas futures contracts. These pre-arranged trades generated approximately $966,403 in illicit proceeds. He further admitted the net profits from these fraudulent trades were split between himself and others involved in the fraudulent trading scheme. James also admitted he and others agreed to falsely document certain proceeds as income on IRS forms in part to conceal the true nature of the funds and to make the illicit profits appear to be legitimate income paid. In a related case, Marcus Schultz previously pleaded guilty before Judge Gilmore July 20, 2020, to a one-count information charging him with conspiracy to commit wire fraud and to violate various provisions of the Commodity Exchange Act including 17 C.F.R. § 180.1. Sentencing is scheduled for June 14. This matter marks the Department of Justice's first effort to prosecute insider trading in the commodity markets under Section 180.1. The IRS-Criminal Investigation's Houston Field Office and FBI's Houston Field Office conducted the investigation. Assistant U.S. Attorney Suzanne Elmilady is prosecuting the case along with Trial Attorneys Jennifer Farer, Drew Bradylyons and Della Sentilles of the Criminal Division's Fraud Section.
