Saturday, 27 August 2016
Last updated 19 hours ago
Apr 30 2014 | 1:38pm ET
A Long Island hedge fund manager has admitted to running a $100 million Ponzi scheme, in part to help keep afloat a struggling resort in the Hamptons.
Brian Callahan pleaded guilty to securities and wire fraud in East Islip, N.Y., federal court. He acknowledged raising more than $118 million for hedge funds and other investments, but actually invested the bulk of it—$96 million—into himself and into a Montauk, N.Y., resort he co-owned with his brother-in-law.
“Callahan used six offshore entities to perpetrate one of the largest investment frauds in Long Island history,” Loretta Lynch, the U.S. attorney in Brooklyn, N.Y., said. “Through lies and deceit, he misled investors and stole investor funds, including investment from a local fire department, to support a lavish lifestyle.”
The fraud ran from 2006 until 2012, according to prosecutors, and operated through Callahan’s Horizon Global Advisors.
Callahan faces up to 40 years in prison when he is sentenced on Aug. 8.