Sunday, 31 July 2016
Last updated 1 day ago
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.