Tue, Sep 2, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

SEC recovers $229.4m from Ponzi schemer Francisco Illarramendi

Thursday, June 30, 2011
Opalesque industry update – On Tuesday, The Securities and Exchange Commission (SEC), the U.S. securities watchdog, revealed it had recovered some $229.4m from an offshore fund held by Francisco Illarramendi and his firm Highview Point Partners LLC, which managed three hedge funds, according to Reuters.

Illarramendi, the 42-year-old Connecticut-based hedge fund manager pleaded guilty in March to running a multiyear Ponzi scheme that defrauded investors of hundreds of millions of dollars. He pleaded guilty to five criminal counts including securities fraud, wire fraud and conspiracy to obstruct justice and defraud the SEC.

The hedge fund manager, who is also a majority owner of Michael Kenwood Group LLC, is charged with running his Ponzi scheme from 2006 until February 2011 by using money raised from new investors to repay old investors. He was also accused of providing a fake income statement that was certified by a Venezuelan accountant, that his company had $275m in assets. The assets did not exist, investigators said.

The SEC told a U.S. court that they had already received the money from Illarramendi’s offshore funds. The assets were recovered last week and will be deposited in a U.S. bank while the civil case against the accused is finalized by the court.

Last month, the 40-year-old Venezuelan accountant Juan Carlos Horna Napolitano of Pembroke Pines, Florida, who provided the spurious income statement, admitted to SEC investigators that he had obstructed the watchdog’s investigation of Illarrramendi. Napolitano pleaded guilty to one count of conspiracy to obstruct an official proceeding of the SEC before United States District Judge Stefan R Underhill in Bridgeport.

In January this year, a U.S. federal judge ordered the freezing of Illarramendi’s assets in connection with the Ponzi scheme investigation.
Komfie Manalo

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the study

  2. Legal – GE Capital and Petters-related hedge fund in legal battle, SEC sanctions Donald Brownstein's hedge fund over conflicts of interest[more]

    GE Capital and Petters-related hedge fund in legal battle From Startribune.com: A billion-dollar legal battle is brewing in Florida over who knew what and when about the decade-long Ponzi scheme operated by former Wayzata businessman Tom Petters. The bankruptcy trustee for two failed Flo

  3. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  4. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  5. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius