Thursday, 25 August 2016
Last updated 17 hours ago
Jan 29 2008 | 3:48pm ET
Daniel Marino, the former chief financial officer of collapsed hedge fund Bayou Group, has been sentenced to 20 years in prison for his role in defrauding investors of $450 million.
Marino is the second former Bayou executive sentenced in the case; last week, co-founder James Marquez was sentenced to more than four years in prison. Marino pleaded guilty in September 2005 to conspiracy and fraud, just months after Stamford, Conn.-based Bayou collapsed. Prosecutors charged Marino and firm co-founder Samuel Israel, and to a lesser extent Marquez, hid millions in losses from their investors over a five-year period.
U.S. District Judge Colleen McMahon ordered Marino to begin serving his sentenced immediately. He had faced a sentence of up to 50 years. She also said she would impose restitution in the "nine figures" on him within 90 days.
"You are as much a career criminal as any mobster or any drug kingpin," she said. "There is simply no alternative but to punish you for your life of crime."
Marino's attorney said he would appeal the sentence. Marino's co-conspirator, Israel, is to be sentenced next month, and faces up to 30 years.
Separately, the U.S. Attorney in Manhattan is pushing for the release of some funds to Bayou’s victims right away, in spite of outstanding litigation.
U.S. Attorney Michael Garcia has asked McMahon to release $309 million to investors whose claims are not the subject of outstanding litigation. He proposed setting up a reserve to pay victims whose claims are unresolved—an estimated $85 million worth.
“Bayou’s investor-victims have waited two and one-half years for the return of the money that Bayou’s principals defrauded from them,” the creditors wrote to McMahon. “Further delay of the initial distribution of the Bayou victims’ restitution fund will only cause Bayou’s victims needless additional financial hardship.”
Their request, backed by Garcia, is opposed by 24 investors suing Bayou. They are pushing for a plan proposed by McMahon, who suggested putting all recovered funds in escrow until all claims are settled.
“No restitution can be paid to any victim until we know exactly who is entitled to restitution and who is not,” she said last week.