Hedge Funds Fall Victim To Medical Accounts Ponzi Scheme

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.


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...

 

FINalternatives Trending

From the current issue of