Thursday, 24 July 2014
Last updated 12 hours ago
Oct 22 2008 | 12:24pm ET
A convicted San Diego hedge fund fraudster has been sentenced to five years in prison by a federal judge.
Paul Henrie Levy, a partner and co-manager of defunct hedge fund Global Money Management, had faced as much as eight years in prison for his role in defrauding investors of some $49 million. He is the third GMM executive to be sentenced in the case.
According to prosecutors, prior to GMM’s collapse in 2004, Levy and co-manager Marvin Friedman ran a Ponzi scheme, raising money through word of mouth, family referrals and, eventually, from institutional investors referred by banks, beginning by about 1997. In addition to using newly-raised money to pay off existing investors, Levy admitted that he diverted some $7 million for his own personal use; a court-appointed receiver later found more than $18 million in investor money in Levy-controlled accounts.
Prosecutors say Levy, who pleaded guilty to tax evasion and conspiracy to commit mail fraud in July, also bilked the government out of about $2.3 million in taxes by filing false returns from 2001 through 2003.
U.S. District Judge Robert Benitez in San Diego also ordered Levy to pay restitution. The amount Levy will owe will be determined at a later date.
Friedman and bookkeeper Alice Maw Swiderski also pleaded guilty in the case, the former getting six years in prison, the latter probation.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…