Monday, 8 February 2016
Last updated 2 days ago
Sep 6 2013 | 4:08am ET
A number of hedge funds—including Platinum Partners—were targets of a $278 million Ponzi scheme.
Four men have been charged with attempting to bilk the hedge funds by misleading them about the value of medical accounts receivable that they had purchased for a fraction of a penny on the dollar. The scam ran from 2007 through 2010.
Two of the men—Robert Feldman and Douglas Kuber—have already pleaded guilty to conspiracy charges. The other two, Jonathan Rosenberg and Richard Shusterman, were arrested this week.
The indictment alleges that Rosenberg and Kuber ran a company called Account Receivable Services, which bought the medical accounts receivable from International Portfolio Inc., headed by Shusterman and Feldman. The men then securitized the holdings, lying about their purchase prices, collection results and resale values to lure investors. In an effort to lure another hedge fund--Eton Park--the men allegedly told that fund that a Platinum-financed portfolio had received more than 10 times the collections it actually garnered. Eton Park did not end up investing in the scheme.
For their troubles, Kuber and Rosenberg allegedly received kickbacks from Shusterman totaling $8.3 million.
Shusterman and Rosenberg face up 200 years in prison on the conspiracy and wire fraud counts. Feldman and Kuber face up to 20 years in prison when they are sentenced.