Prosecutors Go After Fraudster’s Tax Refund

Jul 1 2013 | 1:22am ET

Federal prosecutors are seeking a convicted hedge fund fraudster’s $2 million tax refund.

The lawyers moved to force Francisco Illarramendi and his wife to turn over the refund check, to be put in escrow pending his sentence. Illarramendi has been in prison since January, following his guilty plea to defrauding investors in his Michael Kenwood Group and Highview Point Partners hedge funds of $540 million.

Illarramendi faces up to 70 years in prison, as well as an “enormous mandatory restitution” and fines, at his September sentencing, prosecutors said. Illarramendi’s assets have been frozen.

Illarremendi’s lawyer is not objecting to the government’s push to take the check, but his wife’s lawyer plans to argue that some of the money should pay her living expenses.

It is the second time prosecutors have gone after Illarramendi over a tax refund; they rapped him last year over a $600,000 payment from the state that he allegedly failed to disclose, and allegedly used to pay off a lien on a luxury car and his lawyers.

“It would be prudent for the court to ensure there is not a repeat of Mr. Illarramendi’s misuse of funds,” the prosecutors wrote.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...