October 30, 2017 / 9:17 PM / 2 years ago

Connecticut man pleads guilty to 'Ponzi-like' hedge fund scheme

NEW YORK (Reuters) - A Connecticut man on Monday pleaded guilty to conspiring to defraud investors in a hedge fund in what U.S. prosecutors called a “Ponzi-like scheme” run with another man already charged in a ticketing scam for events like “Hamilton”.

Steven Simmons, 48, pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud before U.S. Magistrate Judge Barbara Moses in Manhattan, the office of Acting U.S. Attorney Joon Kim in Manhattan announced.

Simmons was charged with running the scheme alongside another man, Joseph Meli, who is also accused of swindling investors in a ticket-reselling business for popular events including the soccer World Cup, football’s Super Bowl and “Hamilton”.

Prosecutors said Simmons solicited more than $6 million for the hedge fund, Sentinel Growth Fund Management LLC. They said he took some of the money for his own use, and knew that the fund was operating like a Ponzi scheme, using new investments to pay back earlier investors.

For example, Simmons told one unnamed investor that their money would be invested by a highly successful group of portfolio managers at the hedge fund, according to prosecutors.

Most of that investor’s money was instead wired to an earlier investor within minutes after it was received, and Simmons took $50,000 from the hedge fund for himself the following day, prosecutors said.

Simmons also provided investors with fabricated monthly statements, according to prosecutors.

As part of his plea, Simmons has agreed to forfeit $6.9 million, according to prosecutors. The conspiracy charge carries a maximum sentence of five years in prison.

Sentinel’s founder, Mark Varacchi, pleaded guilty in February in connection with the case, and has cooperated with authorities, court records show.

Reporting By Brendan Pierson in New York; Editing by Andrew Hay

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