Sunday, 25 January 2015
Last updated 1 day ago
Feb 15 2012 | 12:55pm ET
Francisco Illarramendi stole hundreds of millions of dollars from clients, but he can't pay for his lawyers anymore.
Illarramendi, who pleaded guilty in March to running a Ponzi scheme at his Michael Kenwood Group and Highview Point Partners hedge funds, received a court-appointed attorney last week after requesting one.
"I'm not employed and my assets have been frozen," Illarramendi, who is awaiting sentencing, told U.S. District Judge Stefan Underhill in Bridgeport, Conn. "I'm subsisting off charity from friends," and after paying his bills and buying food, there "is nothing left to pay my legal fees."
Illarramendi told Underhill he is already representing himself in several civil suits, including one filed by the Securities and Exchange Commission.
Underhill appointed former federal prosecutor Alex Hernandez to take over Illarramendi's case from John Gleason.
Separately, John Carney, the court-appointed receiver in the Illarramendi case, filed a raft of lawsuits in Connecticut federal court seeking the return of tens of millions of dollars in alleged bribes and kickbacks.
Among the people accused by Carney is Juan Montes, a former senior investment manager at the pension fund for Venezuela's state-owned oil company, Petreleos de Venezuela. PDVSA was by far the biggest victim of Illarramendi's $500 million fraud.
According to Carney, Illarramendi paid Montes $35.7 million in bribes to allow him to continue the scam.
Prominent Venezuelan businessman Moris Beracha was also named. "Illarramendi's business relationship with Beracha coupled with Beracha's access to and connections with Venezuelan government and banking officials was instrumental to Illarramendi's ability to perpetuate the Ponzi scheme," Carney's lawsuit alleges.
"It was a measure of Illarramendi's desperation to maintain and conceal his fraud, and his fanciful belief that a financial windfall was right around the corner, that he was willing to pay exorbitant amounts in bribes and kickbacks to ensure that he was able to attract investments from and participate in transactions with PDVSA's pension funds," a lawsuit added.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…