Saturday, 23 July 2016
Last updated 1 day ago
Oct 8 2013 | 10:33am ET
Prosecutors are pushing for 25 years in prison for former hedge fund manager James Fry, convicted in June of misleading his investors about his ties to Ponzi schemer Thomas Petters.
Fry will be sentenced tomorrow. He could face more than 100 years based on the 12 fraud and making false statements to the Securities and Exchange Commission convictions, but prosecutors said they would be satisfied with 25.
"Fry had choices," prosecutors wrote to U.S. District Judge Richard Kyle. "Fry made the wrong choices. In short, Fry's greed trumped the truth."
The Arrowhead Capital Management founder's own lawyers suggested that six years would be a more appropriate punishment.
"Jim Fry was not a core member of the Petters fraud," Joe Friedberg wrote in his sentencing memorandum.
"He lied to investors about several components of their investments," he continued. But "both the government and the defense seem to agree that Mr. Fry was not aware of the Ponzi scheme" that cost investors $3.65 billion. Arrowhead clients lost $120 million.
Fry was convicted of helping Petters, who is serving a 50-year prison sentence, cover up his default on notes owned by Arrowhead, and of lying to clients about the criminal history of Petters' chief fundraiser, Frank Vennes.