12 Yen Traders Plead Innocent in Fraud Case
As their chief accuser, a one-time undercover FBI agent, quietly watched, a dozen traders and brokers accused of cheating customers pleaded innocent Wednesday. They were charged in the government’s investigation of alleged fraud at Chicago’s commodities exchanges, the world’s largest.
All 12 once traded volatile Japanese yen futures at the Chicago Mercantile Exchange, where silver-haired FBI agent Dietrich W. Volk, using a fictitious name, also traded while gathering evidence of alleged wrongdoing against brokers and traders.
Volk sat motionless with government attorneys as lawyers for the 12 defendants told U.S. District Judge George M. Marovich that their clients were not guilty of charges that include racketeering, fraud and tax violations.
3 Pleaded Guilty
The 12 are among 46 brokers and traders indicted last week by a federal grand jury acting on evidence gathered by Volk and at least three other FBI agents during an extraordinary four-year undercover probe of the Merc and the Chicago Board of Trade.
Three other yen traders pleaded guilty Tuesday to fraud charges and agreed to testify as government witnesses. Arraignments for six other yen traders are expected later this week, and at least some of them are also expected to plead guilty and become government witnesses.
In all, 21 yen traders, about a third of the regulars from the yen pit at the Merc, have been indicted, and defense attorneys now say other yen traders are targets of the continuing investigation. Others indicted traded Swiss franc futures at the Merc and soybeans and Treasury bond futures at the Board of Trade.
Although no trial date was set for the yen traders, Assistant U.S. Atty. Daniel W. Gillogly said the government’s half of the case could take up to two months to present.
Following the arraignment, several of the defense attorneys criticized government efforts to generate publicity for the investigation, which is said to be the among the most complex undercover operations attempted by the FBI. Lawyers were critical of Atty. Gen. Dick Thornburgh and FBI Director William S. Sessions for coming to Chicago last week to join U.S. Atty. Anton R. Valukas in announcing the indictments.
Blasts Publicity
“We’re here today under a cloud and a blast of publicity,” attorney Steven J. Rosenberg told reporters. “You are here today because of that blast of publicity, which in my experience is unprecedented. And I think (when) the . . . head of the FBI, the attorney general and the U.S. attorney take to the airwaves to condemn people who haven’t gone to trial, then we have a problem.
Arraignments in the case are scheduled to continue today, while Chicago Board of Trade members are scheduled to vote on increasing the penalty for each rule violation to $250,000 from $75,000.
