Accused Hedge Fund Fraudster Arrested In Colombia, Indicted In N.Y.

Jan 23 2014 | 11:29am ET

A U.S. Naval Academy graduate defrauded his fellow midshipman as part of a $1.2 million hedge fund fraud, prosecutors said this week.

Bryan Caisse was arrested on Saturday at an airport in Bogotá, Colombia. Prosecutors said he fled the country on a one-way ticket to Colombia after police searched his Manhattan apartment in October; Caisse's lawyer said he was in the country to consult on a resort project.

Caisse pleaded not guilty on Tuesday to 10 counts of grand larceny and one of scheme to defraud in Manhattan state court. Prosecutors said he collected money from friends and former classmates for a hedge fund, but used the money to cover personal expenses, as well as to make Ponzi-style payments to investors.

Caisse's lawyer, Bradley Simon, said his withdrawals from the fund were loans, and told CBS New York his client "intends to repay every penny and more, with interest."

Prosecutors paint a different picture, saying Caisse became evasive when some investors sought to redeem, creating e-mail accounts for fictitious assistants who told clients that Caisse had been seriously injured in a car accident.

"At the heart of every Ponzi scheme is greed and a betrayal of trust," Cyrus Vance, the Manhattan district attorney, said. "This defendant is accused of preying upon those who trusted him."

According to Simon, many of them still trust him, offering to contribute to his bail. Caisse is being held pending payment of that $3 million.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...