Feb 11 A New York fund manager was arrested on
Monday on charges of orchestrating a Ponzi scheme and stealing
around $2 million from three hedge fund investors, U.S.
Federal prosecutors charged Jason Konior, 39, with
defrauding investors by promising to match their investments in
his fund, Absolute Fund LP, many times over.
Prosecutors said he used $2 million of the money he
collected from three hedge funds to pay his own expenses and
cover redemption requests from prior investors, according to the
criminal complaint dated Feb. 7.
A lawyer who has previously represented Konior did not
immediately respond to requests by phone and email for comment.
Konior advertised that his fund provided trading leverage to
new and emerging hedge funds, according to prosecutors. He said
he would match the hedge funds' investment by up to nine times
and put the money into brokerage accounts that investors could
use to trade securities, the complaint said.
If an account lost money, the hedge fund investor would bear
the losses, until its contribution ran out. If the account
earned profits, they would be split between the individual
investor and Absolute.
In emails, text messages and phone conversations, Konior
said he was establishing brokerage accounts for the three hedge
fund investors when he had already stolen their money, the U.S.
Attorney's Office for the Southern District of New York said in
Prosecutors charged Konior with securities fraud and wire
fraud, each of which carries a potential penalty of up to 20
years in prison.
Konior is expected to be presented in Manhattan federal
court before U.S. Magistrate Judge James Cott on Wednesday, the
U.S. Attorney's Office said.
Last May, the Securities and Exchange Commission brought
similar allegations against Konior.
The criminal case is USA v. Konior, U.S. District Court for
the Southern District of New York, No. 13-mag-369.