Tuesday, 27 September 2016
Last updated 23 min ago
Jan 8 2009 | 1:08pm ET
A San Francisco hedge fund manager who used his millions of his investors’ money to finance a lavish lifestyle for himself and his family has been arrested in San Francisco.
Alexander Trabulse was taken into custody Monday at San Francisco International Airport after arriving on a flight from France and appeared later that day before U.S. Magistrate Elizabeth Laporte, the San Francisco Chronicle reports. His arrest came three days after federal prosecutors charged him with mail fraud in a complaint filed in U.S. District Court in San Francisco.
Trabulse allegedly used his Fahey Fund as his personal kitty, spending investor money on cars, a home-theater system and an overseas shopping allowance for his ex-wife, all the while boasting to investors about astronomical—and, apparently, fictional—returns of upwards of 200%, according to the Securities and Exchange Commission. He also let his daughter use a debit card linked to one of the fund's bank accounts to buy furniture, airline tickets and to pay for her 2007 honeymoon in Panama.
In 2006, some 165 investors invested $17.6 million in Trabulse’s funds, whose value were inflated to $50 million when, in fact, they were only worth about $12 million.
Trabulse was sued by the SEC in 2007 and in April, U.S. District Judge William Alsup in San Francisco entered a final judgment against Trabulse, ordering that his assets be liquidated and that he pay a $250,000 civil penalty.