FBI Uses ‘Hedge Fund’ To Catch Scammers

Jan 15 2009 | 2:04am ET

Accused fraudsters Bernard Madoff and Marc Dreier apparently think that many hedge funds are saps. The Federal Bureau of Investigation apparently thinks so, too.

Four con men were convicted on Long Island earlier this week of trying to defraud a hedge fund of $3 billion. What they learned when they arrived to collect their check—allegedly for us in constructing an oil pipeline in Siberia—the foursome learned that there was no hedge fund; it was a sting operation set up by the FBI and U.S. Postal Inspection Service to catch confidence schemers.

According to prosecutors, the four men, Emerson Corsey and Rodney Sampson of Georgia, James Campbell of Iowa and John Juncal of Montana, thought they had a deal with a suburban New York hedge fund to invest in the completion of a pipeline through Buryatia, an autonomous region in western Russia. The schemers claimed that the U.S. government had lent Buryatia $10 billion in Treasury instruments, which Buryatia would use as collateral for the $3 billion investment.

After a week-long trial in Central Islip, N.Y., the jury took just two and a half hours to convict on fraud charges. The men each face up to 20 years in prison, though their attorneys say they plan to appeal the verdict.


In Depth

Bob Doll's Ten Market Predictions For 2016

Jan 7 2016 | 9:37pm ET

Well-known market strategist Robert Doll has published his annual list of ten predictions...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedge Fund Marketing - Making the Most of Your Salesperson

Jan 20 2016 | 8:11pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close...