Saturday, 28 May 2016
Last updated 22 hours ago
Aug 24 2010 | 11:22am ET
The U.S. Marshals service has sold off hedge fund fraudster James Nicholson’s Manhattan pied a terre, for $1.75 million less than he paid for it.
The condominium in New York’s Time Warner Center, on Columbus Circle, sold for $6.75 million. Nicholson paid $8.5 million for the apartment in May 2008, just months before his $133 million Ponzi scheme collapsed.
The Time Warner Center sale follows the sale of Nicholson’s Palm Beach, Fla., penthouse and Southampton, N.Y., estate. Nicholson’s Saddle River, N.J., home is under contract, while the fate of the $337,500 Montvale, N.J., condo he bought for his mother-in-law remains uncertain.
Proceeds from the real-estate sales will be returned to Nicholson’s victims, who lost between $7 million and $140 million during his five-year fraud.
Nicholson pleaded guilty to the fraud in December, admitting that he began lying to investors in his Westgate Capital Management hedge fund as far back as 2004. But the meat of the scam didn’t come until the collapse of Lehman Brothers, which in turn precipitated the collapse of Nicholson’s seven hedge funds. In the wake of his losses on the Lehman bankruptcy, Nicholson lied to investors about his returns and how much the funds were managing: He claimed to run $900 million; he actually ran no more than $60 million.
Nicholson’s scam fell apart in December 2008, when $5 million in redemption checks bounced.
He faces up to 45 years in prison when he is sentenced in October.