Tuesday, 30 August 2016
Last updated 4 hours ago
Mar 31 2011 | 2:27am ET
One of three alleged Michigan hedge fund fraudsters has pleaded guilty and turned state’s evidence against his former business partners.
Anthony Rinkus admitted to ripping off investors in the Atlas Fund of $920,000. The money raised from investors—with Rinkus and his alleged co-conspirators promising big short-term returns from investing in distressed, cash-strapped companies—instead went to pay personal expenses, as well as to Ponzi scheme payments to older investors. None of the money raised was legitimately invested, prosecutors say.
“At the time that James Wiederhold, Anthony Rinkus and Joseph Angioi were pitching the Atlas Fund, Wiederhold was fending off collection efforts by creditors from a prior hard-money lending scheme,” Assistant U.S. Attorney Matthew Borgula said. “Wiederhold owed hundreds of thousands of dollars to former investors, who like the investors in the Atlas Fund, were led to believe by Wiederhold that he would invest their money in hard-money lending, or other investments. As with the Atlas Fund, Wiederhold never invested any of their money in any legitimate investment.
Rinkus pleaded guilty to wire fraud. He faces up to 20 years in prison when he is sentenced in June.