20 Apr 2010
"Hedge Fund Hotel" Manager Arrested For $1.6 Million Fraud
HedgeCo News - Hedge fund manager and owner and President of New York Financial Company (NYFC), was arrested in an FBI operation on allegations of wire and hedge fund fraud in an alleged $1.6 million investment fraud scheme, according to the SEC.
The complaint alleges that New Jersey resident Robert J. Sucarato, through his financial consulting firm, launched two hedge funds, the NYFC Strategic Fund and the NYFC Diversified Strategic Fund, which purportedly invested in the commodities market.
Sucarato solicited for his hedge funds through a website, the SEC claims, working from a “virtual office” in New York City which allowed him to claim that NYFC had a prestigious mailing address. In reality, this space was nothing more than shared office space, rented for a nominal fee, which shared receptionists, conference rooms, and office areas with many other companies.
The allegations include, making false claims about the age of the hedge funds as well as their performance and returns. The hedge fund manager claimed over $7.2 billion in assets under management and a net worth of approximately $798 million.
The charge of wire fraud carries a maximum statutory sentence of 20 years in prison and a fine of $250,000. The charge of fraud by a commodity pool operator carries a maximum statutory sentence of 10 years in prison and a fine of $1 million.
Posted by Alex Akesson at 11:29:00 am