Saturday, 24 September 2016
Last updated 1 day ago
Dec 15 2011 | 2:11pm ET
A pair of alleged hedge fund phonies were arrested yesterday and charged with running a $3.5 million Ponzi scheme.
According to prosecutors, George Sepero and Carmelo Provenzano pretended to run a series of foreign exchange hedge funds in 2009. They trumpeted triple-digit returns and a proprietary algorithmic trading system, none of which existed, the complaint alleges, sending clients faked statements and e-mailing them screenshots of their much-ballyhooed computer trading program.
Instead, Sepero and Provenzano used most, if not all, of the money raised to fund an extravagant lifestyle and to repay previous investors.
"With other people's cash in their pockets, the defendants allegedly went on a spending spree involving luxury vehicles, international travel and extraordinary bar bills," Paul Fishman, the U.S. Attorney for New Jersey, said.
"Nobody asks to be defrauded," Fish continued, "but those looking to invest should always be skeptical of rates of return that go so far beyond the norm."