Sunday, 28 August 2016
Last updated 1 day ago
May 2 2013 | 9:38am ET
A jury is set to begin considering the fate of accused hedge fund fraudster Jeffrey Martinovich today, as the MICG Investment Management CEO awaits a verdict that could send him to prison for centuries.
Prosecutors and Martinovich's defense team made their closing arguments yesterday in Newport News, Va., federal court. Prosecutors allege that Martinovich routinely misled investors about the value of MICG's hedge fund and its investments to overcharge them, and ran a Ponzi scheme to boot.
"It's a story of fraud committed by this man to keep his company afloat and to line his own pockets," Assistant U.S. Attorney Brian Samuels told the jury.
Martinovich's lawyer said the defendant merely made some bad investment decisions and never sought to defraud clients.
"Maybe he was going to hit a homerun, and maybe he was going to strike out," James Broccoletti said. "If he hit a homerun, we wouldn't be here."
"Well, he struck out. A lot of people strike out. These were investment decisions that didn't work out. That doesn't mean they are criminal offenses."
"One fund didn't do well, so now they're unhappy," Broccoletti said of Martinovich's clients. "That doesn't mean he broke his fiduciary duty."
Earlier this week, Martinovich took the stand in his own defense, telling the jury that he believed strongly in MICG's investments and that he was betrayed by an employee.
On EPV Solar, the MICG investment at the heart of the case against him, Martinovich said, "That was the future, and we were really excited about it."
"We were bullish, and everything we received [indicated] that it was doing great."
Prosecutors say that Martinovich told clients that EPV was simply reorganizing when he knew that the company was in serious trouble.
"If we were receiving negative information, we would certainly have been doing less cheerleading," Martinovich explained.
Martinovich also took aim at a key government witness, alleging that MICG investment banker L. Bruce Glasser misled him about EPV's value. "EPV was his baby," Martinovich testified. He said that Glasser was responsible for overvaluing the company.
"He thought he was pretty much going to be fired every month," Martinovich said. "He was unfortunately approximately $200,000 behind on his draw."