Ponzi Schemer Accepts Bill He Can't Pay

Sep 10 2013 | 10:09am ET

Hedge fund fraudster Yusaf Jawed still doesn't know with certainty how much time he'll spend in jail for ripping off investors of $37 million. But he knows what his bill for the crime will be.

Jawed has settled with the Securities and Exchange Commission for almost $34 million. There's little chance that clients of his failed Grifphon Asset Management will ever see it, or the $6.4 million he was ordered to pay in the criminal case against him, since Jawed is broke.

Jawed reached the deal with the SEC in June. He is still awaiting sentencing on the 17 counts of mail and wire fraud he pleaded guilty to in April; Jawed was to be sentenced yesterday, but the hearing was pushed back to Sept. 23.

Under the terms of the plea deal, Jawed will be sentenced to six-and-a-half years in prison, although the sentencing judge can change that term. When he gets out, his wages will likely be garnished.

According to prosecutors, Jawed ran a Ponzi scheme at his Oregon hedge fund for a decade. The SEC alleges he defrauded more than 100 investors of $37 million, making both Ponzi-type payments to earlier investors and using investor money to pay personal expenses.

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