Tuesday, 9 February 2016
Last updated 19 hours ago
Feb 3 2011 | 12:41pm ET
A not-so-royal hedge fund fraudster is facing up to nine years in less-than-regal accommodations after pleading guilty to running a $7 million Ponzi scheme.
Guy Albert de Chimay, the founder of hedge fund Chimay Capital Management, pleaded guilty yesterday to grand larceny, scheme to defraud, forgery and violating securities laws in Manhattan state court. Prosecutors say that de Chimay claimed to be related to the Belgian royal family of the same name—and that he managed more than $100 million on their behalf—to lure his victims, proceeding to steal their money for both Ponzi scheme payments and for personal expenses.
"This case is a classic example of the type of financial criminal activity that exploded in an era of selfishness," Manhattan District Attorney Cyrus Vance said. "The defendant used his distant connection to the Chimay royal family to gain the trust of his victims—his friends—before ripping them off."
De Chimay told his clients he would invest their money in a bridge-loan facility, promising 12% annual returns. Nor did his arrest stop him: Prosecutors alleged that he stole another $700,000 from a friend after he was charged with running the Ponzi scheme.
De Chimay is to be sentenced later this month; the D.A.'s office is seeking a sentence of three to nine years.
"Mr. de Chimay understands that the collapse of the financial markets does not excuse his conduct, but it explains it," his lawyer, Gordon Mehler, said. "He has always been a hard-working guy, and he will work hard to make whole the half-dozen or so people who lost money in this very unfortunate episode."