Second Time Unlucky For Tennessee Hedge Fund Fraudster

Nov 28 2011 | 10:29am ET

A Knoxville, Tenn. man has been found guilty of running a fake hedge fund scheme while under house arrest for an earlier fraud conviction.

Jon Edward Hankins was sentenced last week to more than three years in prison for wire fraud by U.S. District Judge Amy Totenberg. Sentence was passed in Atlanta.

Prosecutors said Hankins was trying to lure investors into putting money into his fraudulent hedge fund while serving the home confinement portion of a federal prison sentence for securities fraud two years ago. The earlier scheme had involved a website, fake brochures and other documents.

Hankins claimed to manage over $100 million in two of his funds, but in reality managed nothing like that.

AP reports more than $200,000 was recovered and returned to victims.

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