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

Hedge Fund Selection: Sussex Partners’ Patrick Ghali Bullish On The Best Of The Best

Oct 2 2014 | 5:56am ET

Ten years ago, Patrick Ghali and Robin Nydes co-founded Sussex Partners with the...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

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.