A former commodities trader in New York has received a year in prison for inflating trading profits.

Michael Garcia, the US Attorney for the Southern District of New York, announced that Charles Craig Gile, the former head of American trading at the commodities desk at Citibank NA, was sentenced today to 12 months and 1 day in prison for conspiring to falsify bank records and to commit wire fraud. On October 19, 2006, Gile pleaded guilty to scheming to inflate the trading profits of the Citibank commodities desk by as much as US$20 million during 2003 in order to enhance his apparent job performance and his eligibility for bonuses from Citibank.

In addition to the prison sentence, US District Judge Robert Sweet also ordered Gile to 2 years of supervised release, to pay restitution in the amount of US$185,819, and to pay a fine of US$3000.

According to the Information to which he pleaded guilty: Gile and his co-conspirator, David Becker, the head of Citibank’s worldwide commodities desk, overstated the financial performance and understated the market risk of Citibank’s commodities desk during 2003. (Becker was sentenced on March 19, to 15 months’ imprisonment on similar charges).

They accomplished this scheme through a number of means, including inputting false data into a computer model used to estimate the value of positions held by the commodities desk. They also input fictitious options trades into the computer model in order to reduce reported market risk and increase reported profits. Furthermore, they caused false information to be reported to the Citibank financial control department, which was monitoring the commodities desk. During 2003 and January 2004, they directed a broker at an independent commodities brokerage firm to supply false market quotes to the Citibank financial control department in order to undermine its monitoring of the Citibank commodities desk.