Soured Hedge Fund Deal At Center Of Bizarre Fraud Case

Feb 15 2012 | 12:55pm ET

A Westchester County, N.Y., man accused of defrauding an oil heir of $20 million claims that the millionaire is seeking revenge for a hedge fund deal gone wrong.

According to Vickram Bedi and his lawyer, Roger Davidson, through a private investigator, began to threaten Bedi after Davidson lost $12.4 million on the hedge fund. What's more, Bedi's lawyers say, Davidson is bribing witnesses, including Bedi's ex-girlfriend, who has pleaded guilty in the case.

Prosecutors paint a somewhat different story, saying that Bedi and his ex, Helga Ingvarsdottir, spent six years convincing Davidson that his computer had been hacked from a remote village in Honduras, and that they could protect him. Davidson signed a security contract with the two worth $10.9 million—$160,000 per month.

But Bedi says that Davidson is mentally ill and paid him to participate in a role-playing game that Davidson used to deal with his anxiety. Bedi said he tried to stop, but was convinced by a lucrative offer to continue—although he made Davidson sign documents explaining that Bedi was authorized to lie to him.

"It was to protect Mr. Bedi from exactly what occurred in this case," Bedi's motion papers allege. "Roger Davidson knew that all discussions can be considered to be fictitious and understood this prior to signing the contract."

If convicted, Bedi faces up to 25 years in prison.

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Editor's Note

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    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…