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Alternative Market Briefing

Virginia hedge fund manager indicted on 26 counts of fraud

Monday, October 15, 2012

amb
Jeffrey A. Martinovich
Bailey McCann, Opalesque New York: Jeffrey A. Martinovich, a Newport News, Virginia-based hedge fund manager has been indicted by a grand jury on 26 counts of fraud including mail fraud, wire fraud, unlawful monetary transactions, and bankruptcy fraud. He faces a maximum penalty of 20 years in prison for each count, if convicted. Martinovich was the CEO of MICG Investment, LLC, an investment firm based in Newport News, Virginia. In 2007, Martinovich started three hedge funds through MICG and began seeking investments.

According to the indictment, in both 2007 and 2008, rather than seek this independent valuation, Martinovich fraudulently inflated the value of the private solar company he was investing in to falsely indicate an increase in the overall value of the hedge fund. Martinovich then allegedly used this fraudulent, unsupported, and inflated value of the solar company to convince new investors to invest in Venture Strategies, as well as to pay himself greater fees.

The solar company eventually declared bankruptcy, resulting in serious financial problems for many Venture Strategies investors. Martinovich filed for Chapter 7 bankruptcy in February 2011 and, during the course of his bankruptcy proceedings, is alleged to have made several false statements about gambling trips he had made to Las Vegas both before and after he filed for bankruptcy. According to a ......................

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