Westgate Fraudster’s Manhattan Condo Sells

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.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.