Sun, May 20, 2018
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. News Briefs - Warren Buffett: Target date funds aren't the way to go, Cambridge Analytica could be reborn under a different name[more]

    Warren Buffett: Target date funds aren't the way to go Planning for retirement can be complicated and stressful. This is why target date funds - funds that are managed based on when you expect to retire - are so attractive. Over time, the balance of stocks, bonds and cash evolve automati

  2. Investing - Hedge funds hike Smurfit Kappa positions amid takeover deal hopes, Hedge fund IBV Capital digs deep to unlock long-term value in a competitive market, Eisman of 'The Big Short' fame recommends shorting Deutsche Bank[more]

    Hedge funds hike Smurfit Kappa positions amid takeover deal hopes From Irishtimes.com: Two US hedge funds, Davidson Kempner and York Capital, have accumulated a combined 4.74 per cent interest in cardboard box maker Smurfit Kappa using financial derivatives. It comes as many investors cl

  3. Foundations of hedge fund managers gave big to controversial donor-advised funds[more]

    In the world of philanthropy and tax-deductible charitable giving, the explosion of donor-advised funds has touched off intense debate. Now, there is evidence that the DAF boom is being further fuelled by hedge fund foundation money. Four of the top five foundations that gave the most to large do

  4. Study: For hedge funds, smaller is better[more]

    From Institutionalinvestor.com: The smaller the hedge fund is, the better its performance is likely to be, according to a new study. The study - "Size, Age, and the Performance Life Cycle of Hedge Funds," released April 26 - sought to determine whether a hedge fund's size and age had any effect on i

  5. Hedge fund returns rose in April for first gain since January[more]

    From Bloomberg.com: Bloomberg Hedge Fund Database shows returns flat this year - Currency strategies had the biggest monthly gain at 13% Hedge fund returns increased 0.78 percent in April, reversing two consecutive monthly declines. The swing of 134 basis points was driven by gains in all seven