Accused Ponzi Schemer Charged With Stealing Another $690K

Oct 29 2010 | 1:47am ET

A New York hedge fund manager who claims royal lineage was back in court yesterday to face new charges of larceny and securities fraud.

Guy de Chimay, who was charged in June with running a $7 million Ponzi scheme, has been slapped with six new charges for stealing a further $690,000, violating "the trust of a friend of his for more than a decade," Manhattan prosecutors told a state court judge.

Chimay, the founder of hedge fund Chimay Capital Management, has denied any wrongdoing. Bail was set at $1 million.

In the new indictment, prosecutors allege that Chimay used his hedge fund as "a personal piggy-bank." If convicted of the most serious charge, grand larceny, Chimay faces 25 years in prison.

Chimay already faces several investor lawsuits as well as one filed by the Securities and Exchange Commission.

According to the SEC, Chimay sold investors on his “Bridge Loan Facility” by telling them he would pool their assets with millions from the princely family of Chimay in Belgium, claiming to be related to the Prince of Chimay. Chimay allegedly said the facility would make low-risk, short-term bets, guaranteeing 12% annual returns.

In fact, Chimay spent at least $6 million to pay his divorce lawyers and the mortgage on his house in the Hamptons, according to the SEC. He allegedly falsified bank statements to hide his fraud, and also lied to investors  about how much his firm managed, claiming to run $200 million. In December, Chimay allegedly sought a multi-million bank loan by claiming he had $13 million in a Bermudan bank account. According to the SEC, he had exactly $13 million less than that in the account


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...

 

From the current issue of