Sunday, 25 January 2015
Last updated 2 days ago
Oct 19 2012 | 11:00am ET
Aleksander Efrosman, one-time hedge fund manager and some time fugitive, has admitted to cheating investors out of $5 million.
Efrosman pleaded guilty to wire fraud on Thursday before U.S. District Judge Nicholas Garaufis in Brooklyn, New York.
Efrosman's clients gave him $5 million in 2004 and 2005 to in invest in his foreign-currency hedge funds, Century Maxim Fund and AJR Capital, but $3 million of this was gambled at the Foxwoods Resort Casino in Connecticut, said prosecutors.
In 2005, the U.S. Commodity Futures Trading Commission filed charges against Efrosman and his funds, alleging that he committed fraud in regards to the sale of foreign currency futures contracts.
The CFTC alleged that between April 2004 and June 2005 the defendant collected more than $5 million dollars from over 100 clients for the purpose of trading managed accounts in forex futures contracts not traded by a registered entity, as is required by law.
Efrosman, a U.S. Citizen, fled the country. He was arrested in Poland in 2011 where, according to Attorney Loretta Lynch, he had acquired a new name—Mikhail Grosman—and a fake Russian passport. Between 2005 and 2011 he had also lived in Panama and Mexico and while in Panama ran a third investment scheme, reports Bloomberg, citing an August letter from Assistant U.S. Attorney Daniel A. Spector to U.S. Magistrate Judge Andrew L. Carter.
It's just the latest conviction for Efrosman, originally from Staten Island, who was extradited to the U.S. from France in 2000, pled guilty to 10 counts of mail and wire fraud in relation to a different forex trading scheme, and was sentenced to three years in prison.
He left prison in April 2003 and fled the country while on supervised release.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…