Sentences Come Down In Gryphon Fraud As Leader Mulls Withdrawing Plea

Sep 15 2011 | 8:52pm ET

Seventeen of the 18 people charged in a Staten Island, N.Y., boiler-room hedge fund fraud have been sentenced—but the leader of the scam may try his hand with a jury.

U.S. District Judge Jack Weinstein sentenced the other Gryphon Holdings defendants over the past two days to prison terms of between three months and two years and one month. Receiving the lightest sentence was Gryphon "mastermind" Kenneth Marsh's ex-wife, Nicole Marsh. The firm's first employee, salesman Baldwin Anderson, received two years.

But Marsh's sentencing was postponed until next week after Weinstein indicated he'd sentence Marsh to 10 years in prison.

That led to a protest from Marsh's attorney, who said after the hearing yesterday that his client might withdraw his April guilty plea.

"We are cautiously optimistic that the court will reconsider all of the proceedings, including some of the sentences he has imposed today," Alan Futerfas said. "His sentence should be proportional to some of the sentences imposed."

According to prosecutors, Gryphon lied about its assets under management, invented a relationship with George Soros and made up offices in Manhattan, London and Sydney, Australia, when it was actually run out of a Staten Island strip mall. Marsh also allegedly made up two traders.

Last month, Weinstein said he planned to sentence Marsh to about five years in prison. But the judge changed his mind after hearing from seven of Marsh's victims yesterday.

"I have now seen this crime in its full depth and what it's meant to all these people," Weinstein said.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of