Hedge Fund Fraudster Sentenced To 40 Months

Feb 2 2009 | 1:52am ET

A hedge fund fraudster-turned-part-time chef has been sentenced to less than four years in prison for defrauding investors of $10 million.

The sentencing of Vincent Montagna, which came down on Dec. 22, has attracted special attention because Montagna’s lawyer is Ira Sorkin, who also represents accused Ponzi schemer Bernard Madoff, according to Bloomberg News

Montagna, who pleaded guilty two years ago securities fraud, investment adviser fraud and wire fraud, could have faced as much as 80 years in prison, although prosecutors sought only seven to nine years. In the end, U.S. District Judge John Koeltl gave him 40 months.

The judge, who called Montagna’s crimes “very significant,” said the sentence was “sufficient but no greater than necessary to accomplish the purposes of deterrence, just punishment and protection of the public.” In addition to the jail time, Koeltl ordered Montagna to forfeit $686,000 and properties in Pennsylvania and Nevada. In addition, any future income—Montagna, who remains free on bail, works as a freelance chef for Wolfgang Puck Catering—will be used to repay his victims the $7.7 million he still owes them.

Montagna was arrested in May 2005, accused of defrauding 70 investors in his Tiburon Asset Management and Tiburon Partners hedge funds. He raised about $10 million between 1998 and 2002, losing almost all of it. The indictment accused him of lying about how much the funds managed, hiding conflicts of interest and diverting client money for his own use. In one instance, one of the funds sold a $325,000 property outside of Philadelphia to a partnership controlled by his wife for $1.

Montagna is to report to prison on March 6, after one last job with Wolgang Puck cooking for an Academy Awards-related event later this month. While free on $300,000 bond, Montagna has won travel waivers allowing him to go to such sunny locales as California, Florida and Hawai. In November 2006, he was given permission for job-related travel.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.