Guilty Pleas In $7 Million N.Y. Hedge Fund Fraud

Dec 7 2010 | 1:02am ET

It was all a lie: Two men admitted last week that their "hedge fund" was little more than scam that cost investors more than $7 million.

Igor Levin and Yevgeny Shvartsshteyn pleaded guilty to fraud charges in Manhattan federal court. The two men said that they never invested the money entrusted to them by investors, instead sending the money to banks in the Ukraine. That money appears to have disappeared.

The two men had told investors they would put their money into international real estate.

Of course, a little digging might have saved their latest victims the trouble. Shvartsshteyn served more than two years in prison 10 years ago for mail fraud, while Levin did 11 months for a firearms violation in the early 1990s. He was also rapped at around the same time for possession of stolen property.

This time, both men face much longer stints in the pokey: Up to 20 years apiece. Levin faces deportation to the Ukraine after completing his sentence.

Both men have also agreed to forfeit the $7 million they stole.

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