A Florida investment professional is facing charges in the U.S. District Court of Manhattan. The white collar criminal complaint alleges that he collected money by promising his investors that he could get them early shares in big name IPOs for Facebook and Groupon. He then used that money on personal expenses and to pay off his personal IRS tax liability. If convicted, the man faces up to 65 years in federal prison.
The man’s investment firm, Praetorian Global Fund Limited, is accused of collecting more than $11 million dollars by making fraudulent claims. He is said to have claimed that he already owned more than one million shares of the privately held companies. When those companies went public last month, investors realized that their ownership shares never materialized.
This is not the first time the Florida man has run afoul of SEC regulations. He was charged in 2009 with backdating promissory notes in order to avoid registration requirements. He was made to pay significant penalties and agree to a permanent injunction regarding his work as a mutual fund manager.
Financial crimes and other white collar criminal matters are taken seriously by federal investigators. This man has been charged with money laundering, wire fraud, and conspiracy to commit securities fraud. He faces heavy fines and disgorgement penalties, in addition to a lengthy prison stay. Federal agencies have ramped up enforcement of white collar criminal laws and prosecutors are aggressively seeking maximum penalties in courts all over the country. With almost unlimited resources on their side, anyone accused of a white collar crime is at a serious disadvantage.
Source: Business Week, “Florida man charged in NY investment-fraud case,” by Larry Neumeister, 17 November 2011