Senior Citizen Ponzi Schemer Retired To Prison

May 23 2012 | 11:46am ET

A 65-year-old California man will spend the first of his golden years behind bars after pleading guilty to a hedge fund Ponzi scheme.

John Clement of Encinitas was sentenced to two years in prison yesterday. Clement pleaded guilty in September to ripping a dozen investors in his Edgefund Capital "hedge fund" off to the tune of $4.9 million.

According to prosecutors, Clement told investors that Edgefund offered returns of 1.5% to 2% every month with little or no risk. He then sent his victims phony account statements to back up his claims.

In addition to Ponzi scheme payments, Clement spent about $300,000 of the money he raised on personal expenses.

U.S. District Court Judge Irma Gonzalez also ordered the Encinitas man to pay $4.9 million in restitution and three years of supervised release. But she doubted he'd be able to make good on the former.

"I don't think you'll ever be able to make up $4.9 million, in this economy, at your age," she said.

While Clement told Gonzalez that he does "regret every single thing" he did, his attorney blamed what he called his client's aggressive form of brain cancer for his behavior. And while Charles Rees said the cancer was in remission, there is still an "excellent chance" that Clement would die in prison.


In Depth

'Smart Beta' Funds In Regulators' Sights, Hedgies May Be Next

Mar 26 2015 | 11:11am ET

Funds that mimic strategies used by active managers for a fraction of the cost could...

Lifestyle

Study: Both Marriage and Divorce Lead to Negative Hedge Fund Performance

Mar 25 2015 | 6:51pm ET

Trouble at home leads to trouble in the market for fund managers, according to researchers...

Guest Contributor

Concerned About Your HFT Exposure? Hedge It!

Mar 26 2015 | 1:06pm ET

High-frequency trading has been a persistent storyline for several years. The trading...

 

Sponsored Content

    Mar 9 2015 | 6:35am ET

    Kelly RodriquesKelly RodriquesAs more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…

Editor's Note