Monday, 28 July 2014
Last updated 2 days ago
Mar 9 2011 | 12:37pm ET
On the same day he pleaded guilty to defrauding investors in his hedge fund, Francisco Illarramendi got some more good news: The Securities and Exchange Commission filed new charges against him.
Illarramendi, who faces up to 70 years in prison on the wire fraud, securities fraud, investment adviser fraud and conspiracy fraud convictions, now faces civil allegations that he ran a Ponzi scheme totaling in the hundreds of millions of dollars.
The SEC, which in January sued Illarramendi and his Michael Kenwood Group for allegedly misappropriating $53 million in investor assets, accuses Illarramendi of misleading investors about the value of his hedge funds. The Connecticut man claimed to manage $540 million, but when the SEC began looking into him and the funds, he allegedly had two Venezuelan men doctor up a letter from an accountant attesting to the existence of $275 million that did not, in fact, exist.
"Illarramendi knew the SEC was on to his scheme and compounded his fraud by attempting to mislead the Commission's staff," David Bergers, head of the SEC's Boston office, said.
Prosecutors have charged the two Venezuelans, Juan Carlos Guillen Zerpa and Juan Carlos Horna Napolitano, with conspiracy to obstruct an SEC probe.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…