‘Dumbbell’ Fugitive Hedge Fund Manager Arrested

Jan 12 2007 | 12:54pm ET

Joseph Ferona, the former head of Castle Rock Trading, allegedly a sham hedge fund, was recently arrested outside a Texas health club after having eluded authorities for more than a year, according to the Rocky Mountain News.

Ferona raised $2.8 million from unsuspecting high net-worth individuals for his Global Prosperity Fund but pocketed the cash for personal expenditures, such as a down payment on a new home, boats, cars and cruises. He also made bogus claims that his fund had recorded annual gains of more than 40% over a five-year span when, in fact, from 2000 to 2002, his fund was in the red.

After the Securities and Exchange Commission finally caught wind of Ferona in 2005, he fled to Milan, Italy, but returned to Colorado less than a week later and stayed with his ex-wife before vanishing again, according to the SEC.

The FBI finally caught up to Ferona outside his gym on Dec. 13 and apprehended the barbell jockey, who is being held in Denver without bail awaiting trial, tentatively set for March. He faces prison time and fines after being indicted for mail fraud, wire fraud and money laundering.


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