Hedge fund manager Lloyd Barriger was sentenced to more than five years in prison for defrauding investors of $12.6 million.
Barriger pleaded guilty last year to misleading new investors in his Gaffken & Barriger hedge fund after it had collapsed, the victim of a series of failed real-estate loans. Barriger continued to sell the fund as safe and liquid, with promises of 8% annual returns, even as it defaulted on a $20 million credit line and delinquencies in its portfolio increased.
Barriger was sentenced to five years in prison and ordered to pay $21.75 million in forfeitures and restitution. Barriger’s lawyer said that his client isn’t likely to be able to pay those sums, calling him “penniless” and reliant on food stamps.
Prosecutors had sought more than 15 years for the 57-year-old; his own lawyers asked for no more than two.
“Let me say without hesitation, I am horrified that as many people lost money investing with me,” he wrote to U.S District Judge Cathy Siebel earlier this month. “I am so very sorry people have been put in financial hardship based on the losses they sustained by investing with me.”