Two Hedge Fund Managers Sentenced in Manhattan Federal Court for Securities Fraud
|U.S. Attorney’s Office June 18, 2010|
PREET BHARARA, the United States Attorney for the Southern District of New York, announced that ALAN FISHMAN and DANIEL LEDVEN were sentenced earlier today by United States District Judge DENISE L. COTE for their roles in operating a fraudulent hedge fund that defrauded investors of approximately $20 million. FISHMAN, who was the owner and President of A.R. Capital Group, L.P. from 2002 until February 2006, was sentenced to 37 months in prison. LEDVEN, who managed and operated A.R. Capital Group, received 57 months in prison.
According to the charging documents in this case:
From 2003 through at least February 2006, LEDVEN and FISHMAN, among others, fraudulently solicited investors for a purported hedge fund that was managed by a company they controlled called A.R. Capital Group, Inc ("A.R. Capital"). An offering memorandum and brochure that was approved by LEDVEN and FISHMAN, and sent to investors by other representatives, falsely stated that the fund invested in international real estate companies and engaged in active, leveraged trading. The written materials also contained other misrepresentations about whether the fund would be audited, and LEDVEN and FISHMAN's biographical profiles, among other things. In addition, LEDVEN sent false and misleading monthly account statements to investors that showed large, positive returns on their investments.
Between 2003 and September 2006, A.R. Capital raised approximately $20 million from individual investors in the purported hedge fund. During that same time period, however, approximately $18 million of those investor funds were wired to various bank accounts in the Ukraine.
LEDVEN and FISHMAN pleaded guilty On March 2, 2010, and March 4, 2010, respectively, to one count each of conspiring to commit securities fraud. At the time of their guilty pleas, Judge COTE entered forfeiture orders in the amount of $160,000 against FISHMAN and $213,693 against LEDVEN as the proceeds each obtained from the crime.
LEDVEN, 38, resides in Cresskill, New Jersey. FISHMAN, 50, resides in Brooklyn, New York.
Mr. BHARARA praised the investigative work of the joint Federal Bureau of Investigation and New York City Police Department task force in this case, and thanked the United States Securities and Exchange Commission for its assistance.
The prosecution is being handled by the Office's Organized Crime Unit. Assistant United States Attorney DANIEL S. GOLDMAN is in charge of the prosecution.