Prosecutor: Fake Iraq Veteran Sold Fake Hedge Funds

Sep 21 2012 | 11:44am ET

Four men have been charged with ripping off investors with a bogus hedge fund scam that promised to profit from investments in Iraq.

Rudolph Coenen of Florida and three men from Toledo, Ohio, were slapped with 83 counts of money laundering and fraud. Prosecutors say they raised $24 million from tens of thousands of investors for two hedge funds that didn't actually exist.

Bayshore Capital Investments and BH Group flogged Iraqi dinar sales, telling clients that the investments were protected by the U.S. government and would soar in value following a revaluation. Coenen even called the Sean Hannity show in 2010 to promote the Iraqi currency.

But the very existence of the hedge funds wasn't the only thing Coenen and his co-conspirators were allegedly lying about. Prosecutors say the men promoted Coenen as a wounded veteran of the first Gulf War; in fact, he didn't serve in the conflict or win a Purple Heart.

"These defendants made false statements time and again to convince people to part with their savings and hard-earned cash," U.S. Attorney Steven Dettelbach said. "The fact that one defendant falsely claimed he was wounded while fighting in Iraq is particularly egregious."

In addition to Coenen, prosecutors have charged Charles Emmenecker, Bradford Huebner and Michael Teadt.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...