Former Finance Executive Andrew Caspersen Sentenced: Defrauded Investors Of Over $38 Million

[nitpicker]

https://www.justice.gov/usao-sdny/pr/former-finance-executive-andrew-caspersen-sentenced-four-years-prison-defrauding

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Friday, November 4, 2016

Former Finance Executive Andrew Caspersen Sentenced To Four Years In Prison For Defrauding Investors Of Over $38 Million And Misappropriating Over $8 Million From His Former Employer
(snip)

According the Information and other filings in Manhattan federal court, and statements made in today’s proceedings:

The Scheme to Defraud Investors

Beginning in November 2014 and continuing until his arrest in March 2016, CASPERSEN engaged in a Ponzi-like scheme to defraud investors, including close friends, family members, and college classmates, by falsely claiming that their funds would be used to make secured loans to private equity firms and would thereby earn an annual rate of return of 15 to 20 percent. In total, CASPERSEN attempted to defraud more than a dozen investors of nearly $150 million. As a result of the false and fraudulent representations made by CASPERSEN, investors wired a total of approximately $38.5 million to shell company bank accounts controlled by CASPERSEN. Among those defrauded was a charitable organization, which made a $25 million purported investment with CASPERSEN, and which CASPERSEN solicited for an additional $20 million shortly before his arrest. CASPERSEN never used investor funds to make the secured loans that had been promised. Instead, CASPESEN used investor funds for purposes that investors had not authorized, including to make securities trades in his own brokerage account and to make periodic interest payments to earlier investors. CASPERSEN went to great lengths to execute and conceal his criminal conduct: he fabricated promissory notes and other legal documents, set up fake entities with names resembling those of real private equity funds, opened bank accounts in the names of those shell companies, registered a domain name and email address purportedly associated with a legitimate private equity firm, and used the identities of two individuals without their authorization.

The Scheme to Divert Funds from the Park Hill Group

From January 2013 through March 2016, CASPERSEN was employed in the secondary advisory group at Park Hill Group. In July 2015, CASPERSEN opened a bank account under the name “PHG Operating LLC,” which was controlled by CASPERSEN for his own benefit and was unknown to Park Hill Group (the “Fake PHG Account”). In the fall of 2015, CASPERSEN directed clients of Park Hill Group to wire a total of approximately $8.9 million, representing payment for legitimate work that Park Hill Group had done, to the Fake PHG Account. CASPERSEN then transferred those funds to his brokerage account, in order to execute trades in securities for his own benefit. CASPERSEN later repaid Park Hill Group using the proceeds of his securities fraud scheme.
(snip)