March 19, 2013 / 9:41 PM / 5 years ago

Judge orders fake fund manager Hicks to prison for 40 months

BOSTON (Reuters) - Andrey Hicks, who invented an Ivy League resume and Wall Street credentials to steal $2.3 million from investors for a made-up hedge fund, will spend more than three years in prison, a judge ordered on Tuesday.

U.S. Federal Judge Patti Saris sentenced Hicks, 29, who most recently lived in Massachusetts, to serve 40 months in prison and ordered him to pay $2.3 million in restitution.

The sentencing ends one of the more brazen hedge fund frauds at a time wealthy investors are still reeling from the fallout of the Bernard Madoff and Allen Stanford investment swindles.

Madoff was arrested in 2008 and is serving a 150-year prison term for a Ponzi scheme considered to be the biggest financial fraud in U.S. history, while Stanford is serving a 110-year prison sentence.

Hicks, a college dropout, portrayed himself as an exclusive hedge fund manager whose investing style relied on mathematical models he said he developed as a PhD student at Harvard University.

In reality, Hicks had no degrees from the university and left after three semesters as an undergraduate, having earned a barely passing grade of D in the only mathematics course he took. He also lied about having once managed a hedge fund at Barclays Capital, the U.S. Attorney’s Office in Boston said.

The money Hicks raised from wealthy clients including National Basketball Association player Kris Humphries, who was briefly married to reality television star Kim Kardashian, was used to pay for personal expenses, according to prosecutors.

Hicks fabricated a trumped up investing record at his fake fund, Locust Offshore Management, telling clients that he earned an 80 percent trading profit in 2011. The average hedge fund that year lost about 5 percent.

A year ago, under the civil case, a U.S. judge ordered Hicks to pay back more than $7.5 million, the U.S. Securities and Exchange Commission said.

Reporting By Svea Herbst-Bayliss; Editing by Bernard Orr

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below