Prison bars

Ex-hedge fund manager sentenced to 15 years for USD5m fraud

Aleksander Efrosman, the former hedge fund manager who went on the run after defrauding his clients of over USD5m, has been sentenced to 15 years in prison.

Efrosman, the investment manager of Century Maxim Fund and AJR Capital, was extradited from Poland to face wire fraud charges and pleaded guilty on 18 October 2012.
 
In addition to the prison term, he has been ordered to pay restitution of approximately USD4m.
 
“This case proves the old adage: ‘you can run, but you cannot hide.’ Aleksander Efrosman stole over USD5m from unsuspecting investors and fled the country, then engaged in a globetrotting effort to escape justice. But the coordinated efforts of law enforcement resulted in his capture,” says Loretta E Lynch, US Attorney for the Eastern District of New York. “Today, Efrosman has finally been held to account for his betrayal of his clients’ trust.”
 
Between January 2004 and June 2005, working from offices in Brooklyn and Staten Island, Efrosman defrauded investors by soliciting investments supposedly for the purpose of trading in the stock market and the foreign currency exchange market. Efrosman falsely told investors that he had a history of profitable trading and that the investments would be protected by a "stop-loss" mechanism which ensured that no trade lost more than three per cent. Based on these misrepresentations, Efrosman raked in over USD5m from more than 100 investors. Efrosman did not invest the funds as promised, but instead used the funds for his personal benefit, including gambling over USD3m at the Foxwoods casino.
 
Efrosman fled the US in 2005 with millions of dollars of investor funds. He first travelled to Cozumel, Mexico, then to Panama and ultimately to Poland, where he assumed the identity of Mikhail Grosman using a fake Russian passport.
 
In a coordinated multinational effort, law enforcement authorities in Austria, the Czech Republic, and Poland tracked, located, and ultimately arrested Efrosman in Krakow, Poland, on 28 May 2010.

Further reading



Upcoming training

Mon, 29/09/2014 (All day) - London
Thu, 02/10/2014 (All day) - London