Accused Hedge Fund Fraudster Bipolar, Mother Says

Aug 8 2011 | 11:23am ET

The mother of accused hedge fund fraudster Anthony Klatch says her son is not to blame for allegedly defrauding investors of more than $2.3 million.

Charmaine Maynard, who flew to Tampa, Fla., last week to be with her son, who is facing extradition to Alabama, told the Wilkes-Barre (Pa.) Times Leader that Klatch's bipolar disorder is responsible.

Maynard, who said that bipolar disorder runs in the family, tried and failed to get her son to seek help when she first noticed his symptoms three years ago, she said. Maynard testified as to her diagnosis at his detention hearing last week, where she said he finally acknowledged he had a problem.

Klatch and his partner, Timothy Sullivan, are accused of lying to investors in their TASK Capital Partners. The duo allegedly told investors that the fund, which they founded in 2009, had already been in business for 12 years. Their prospectuses were also filled with other "material misrepresentations and material misleading omissions," the indictment alleges.

According to prosecutors, Klatch and Sullivan, who each invested a whole $1 in TASK, invested only about 60% of the money they raised by the end of 2009, losing everything on a handful of spectacularly bad investments, at least two of which posted big losses in just minutes. The rest of the money was used to "pay off the angry investors" or simply funneled into Klatch's "personal bank account," prosecutors say.

Rather than coming clean, in January 2010 Klatch and Sullivan told investors that "their entire investment had been lost in a single trade."

Maynard said she was shocked by what she found at her son's condominium in Florida, noting that bipolar disorder can case delusions of grandeur.

"When I came down, it's like Bernie Madoff lived here," she said. Prosecutors are seeking the forfeiture of several luxury vehicles, including a Ferrari, an Aston Martin and a BMW, as well as a boat, all purchased by the 27-year-old over the past four years.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

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

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Often seen as a passion project, or part of a philanthropic venture, rare and fine stringed instruments offer an exciting option to diversify one’s investment portfolio while providing an opportunity for an exceptional long-term investment.