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

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

Versum Materials (VSM), with a market capitalization of $2.7 billion, enables chipmakers to achieve higher performance at lower cost with enhanced reliability. Versum is a leading global provider of electronic materials for the integrated circuit and flat-panel display markets.