Wednesday, 24 August 2016
Last updated 8 min ago
Jul 26 2013 | 10:38am ET
Investors have accused a Cincinnati hedge fund manager of defrauding them of millions of dollars in a Ponzi scheme.
Glen Galemmo and his associates ran "an elaborate Ponzi scheme in the guise of an investment fund, the demise of which is now believed to have cost investors tens if not hundreds of millions of dollars," the lawsuit, filed this week, reports. An investor with Galemmo attached an affidavit with an e-mail from Galemmo, telling him Queen City Investments "will no longer be in operation."
"Although I am sure you may have questions regarding the circumstances of the closing of the business, please do not come to the office as you will not be able to get into the building," Galemmo wrote on July 17.
Galemmo told the Cincinnati Enquirer that his lawyers have advised him not to speak with clients, and calls to his investment groups were directed to an Internal Revenue Service special agent.
The lawsuit names Galemmo, his wife, several of his companies and two men, Edward Blackledge and Wiley Kyles. In addition to running the Ponzi scheme, the investors allege that Galemmo and his wife "have fled the jurisdiction of this court, taking property with them" to avoid their creditors. It also called into question Galemmo's claim to have returned 432% from 2006 through 2011 without a losing year, noting that he and his wife have had trouble paying their taxes.
Galemmo's lawyer said that his client is cooperating with the authorities and that he has not "'absconded' from the jurisdiction or taken steps to liquidate assets."
The lawsuit against Galemmo seeks an order blocking the sale of assets and recovery of investment.