No Pay For Westgate Receiver

Feb 11 2010 | 8:05am ET

The receiver in the James Nicholson hedge fund fraud case earned $2.4 million for his work in the first nine months of the year. For the last three, he’s getting nothing, for now.

The federal judge overseeing the $133 million Ponzi scheme case has rejected Lee Richards’ request for $266,000 in fees and expenses for the fourth quarter. U.S. District Judge Richard Berman said the new payout would bring to 30% the receiver’s share of the $9.5 million recovered.

The judge asked the receiver and his attorneys to “reexamine” their request.

In his request, Berman noted that he had already discounted the bill by 38%. The request also included more than $90,000 for forensic accounting form AlixPartners.

Nicholson pleaded guilty in December. The Westgate Capital Management founder admitted lying to investors from 2004 until December 2008, when $5 million in redemption checks bounced. The collapse of Lehman Brothers precipitated the collapse of Nicholson’s seven hedge funds. He claimed to be managing $900 million when his accounts held no more than $60 million.

Nicholson faces as much as 45 years in prison when he is sentenced on April 30.

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