Accused Hedge Fund Fraudster Appears in VA Court

Oct 15 2012 | 10:35am ET

MICG Investment Management and founder Jeffrey Martinovich, of Norfolk, Virginia, appeared in court Friday on fraud charges related to the management of his Newport News-based hedge fund.

Martinovich was indicted Wednesday on 26 charges including mail fraud, wire fraud, unlawful monetary transactions and bankruptcy fraud, according to a news release from the U.S. Attorney's Office in the Eastern District of Virginia. He faces a maximum penalty of 20 years in prison for each count if convicted.

Martinovich is accused of having over-valued a non-public security owned by his MICG Venture Strategies hedge fund, then using the higher valuation to overcharge investors hundreds of thousands of dollars in management fees.

The indictment alleges that in both 2007 and 2008, the value of a solar energy company in which the fund had invested was fraudulently inflated to indicate an increase in the overall value of the hedge fund.

According to the indictment, as reported in the Norfolk Pilot, the solar company went bankrupt in February 2010, MICG closed up shop in May that year and Martinovich surrendered his broker's license.

Martinovich and his fund were the targets of litigation by investors looking to recover their money. He filed for bankruptcy in 2011 but, according to the indictment, failed to report thousands of dollars in gambling winnings and losses during those proceedings.


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of