Sunday, 26 March 2017
Last updated 1 day ago
Feb 12 2014 | 11:14am ET
Private-equity manager Lawrence Penn has been arrested for allegedly defrauding investors of $9.3 million.
Penn was indicted on Monday and turned himself in. He pleaded not guilty to counts of grand larceny, money laundering and falsifying business records. Penn's alleged accomplice, Altura Ewers, has also been charged. Ewers was arrested Sunday in San Francisco and will be extradited to New York.
The criminal charges come less than two weeks after Penn, who runs Camelot Acquisitions Secondary Opportunity Management, was sued on similar allegations by the Securities and Exchange Commission. Prosecutors say Penn paid out bogus fees to a shell company set up by Ewers, who then moved the money into accounts and companies controlled by Penn.
Penn allegedly spent the loot on a pair of apartments, jewelry and a luxury car—as well as for more prosaic items, such as credit-card bills and office space.
"Stealing from investors not only damages the market, it hurts individuals," Manhattan District Attorney Cyrus Vance said. "The defendants in this case are charged with defrauding the fund for millions while continuing to solicit unwitting investors."
Penn's bail has been set at $2.5 million.