| July 26
July 26 A former hedge fund manager pleaded
guilty on Friday to defrauding investors in a $12.6 million
scheme, more than five years after the fund collapsed under the
weight of failed real estate loans.
Lloyd Barriger, who operated Gaffken & Barriger, a
Monticello, New York-based investment fund, pleaded guilty in
White Plains federal court to charges of securities fraud, mail
fraud and conspiracy, the U.S. Attorney's Office said in a
Federal prosecutors accused Barriger of bilking more than 70
investors from July 2006 to March 2008 by soliciting millions of
dollars for a fund he falsely presented as a safe and liquid
investment. He continued to promise investors an 8 percent
return, even as the fund defaulted on a $20 million line of
credit and held an increasingly delinquent portfolio, according
to an indictment filed in February.
"Once again, belief in hedge funds by hopeful investors
proved to be sadly misplaced," Manhattan U.S. Attorney Preet
Bharara said in a statement. "In this case, the perpetrator was
not in a sleek Manhattan building but rather in Sullivan
Barriger's lawyer, federal defender Mark Gombiner, did not
immediately respond to an email seeking comment.
Barriger, 57, of Damascus, Pennsylvania, faces a maximum
sentence of 65 years in prison. U.S. District Judge Cathy
Seibel, who is overseeing the case, scheduled a sentencing
hearing for Nov. 15.
In addition to a prison term, federal prosecutors will seek
at least $12.6 million in forfeited assets, representing the
proceeds of the charged crimes, the indictment said.
The case is USA v. Barriger, U.S. District Court for the
Southern District of New York, No. 11-416.