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

Malik: The Science of Deal Sourcing 201

Aug 27 2015 | 5:35pm ET

Deal sourcing is understandably a hot topic among private equity firms because it...

Lifestyle

Rolling Art Advisors Marketing Collectible Car Fund As Uncorrelated Alternative

Aug 27 2015 | 6:47pm ET

A new fund is trying to provide investors with greater access to an emerging asset...

Guest Contributor

Agecroft Partners: Hedge Fund Industry Assets to increase $250B by Summer 2016

Aug 11 2015 | 11:29am ET

Assets will continue to flow into the hedge fund industry despite long-standing...

 

Editor's Note