Phony Hedge Funder Gets Eight Years

Feb 8 2012 | 12:58pm ET

A fake Atlanta hedge fund manager was sentenced to more than eight years in prison for ripping off investors to the tune of $8.8 million.

Charles Vaughn ran a $10 million Ponzi scheme, raising some $10 million from at least 25 investors for his CM Vaughn "hedge fund." Vaughn promised monthly returns of 2% to 3.5% in the scam, which ran from July 2004 through March 2008. In addition to the Ponzi-style payments, Vaughn skimmed investor capital for to pay his own personal expenses.

Vaughn also sent out phony account statements and promised that investors' capital would be insured as to prevent them from falling below a given backstop.

Vaughn, who pleaded guilty to fraud in October, was sentenced to eight years and four months in prison and three years' supervised release. He was also ordered to pay $8.8 million in restitution.


In Depth

U.S. Treasury Moves on Reinsurance Loophole

Apr 24 2015 | 5:11pm ET

The U.S. Treasury Department has released proposed rules aimed at limiting the ability...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Starting a ‘40 Act Fund Family? Don’t Forget Your Board

Apr 30 2015 | 7:18am ET

The convergence of the hedge fund and mutual fund worlds continues unabated, as...

 

Editor's Note