Former private equity firm CEO accused of fraud

| Jan 25, 2021 | White Collar Crimes |

Federal authorities have charged the founder and former CEO of a New York City private equity firm with securities and wire fraud in connection with a scheme that allegedly bilked investors out of tens of millions of dollars. A conviction on both counts could send the 50-year-old New Canaan man to a federal prison for 40 years. The U.S. Attorney’s Office for the Southern District of New York announced the charges and the man’s arrest in a Jan. 12 press release.

Fabricated track record of success

According to federal prosecutors, the man convinced more than 300 investors to put $58 million into two real estate funds by telling them that he had a long track record of success in the New York City property market. Many of his clients say that they lost all of their retirement savings. He also claimed that his funds were free of debt and managed buildings occupied by prominent corporate tenants. Prosecutors say that these were all fabrications.

Attempt to destroy evidence

When he learned that the Securities and Exchange Commission were investigating his activities, the man allegedly tried to cover his tracks by deleting 10,000 computer files. The erased data included closing documents and the financial details of property transactions. In addition to the criminal prosecution, the man faces an SEC civil lawsuit.

Electronic records and paper trails

Mounting an effective defense in cases involving white collar crimes may be challenging when prosecutors can establish a paper trail backed up by electronic evidence like emails, computer files and text messages. This is why these matters are often resolved by plea agreements. During these negotiations, experienced criminal defense attorneys could urge prosecutors to make generous offers by reminding them of the risks of arguing complex cases before juries. They may also mention mitigating factors like remorse and a willingness to make restitution.

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