Fraud in the News

Boutique banker allegedly bilks charity

Andrew W.W. Caspersen, 39, a former partner at PJT Partners' Park Hill Group, was arrested on March 28 on charges that he stole $25 million from investors and tried to fraudulently obtain $70 million more, according to the Reuters article, Partner at N.Y. boutique bank PJT accused of securities fraud, by Nate Raymond and Koh Gui Qing. He's been charged with securities fraud and wire fraud.

According to the article, prosecutors said Caspersen sought $24.6 million from a charitable foundation affiliated with a New York hedge fund along with $400,000 from one of the fund's employees. He claimed he would invest the money in a secured loan to a private equity fund. Instead, he allegedly used it for personal options trading; he lost $14.6 million in the process. He used other funds to cover up unauthorized wire transfers at his company.

Caspersen, a graduate of Princeton University and Harvard Law School, was arrested on March 27 and released on a $5 million bond following a court hearing the next day, according to the article.

A grisly case of wire fraud

According to The Washington Post article, The horrifying case of the husband-and-wife cadaver dealers, by Lindsey Bever, March 26, Arthur Rathburn and his wife, Elizabeth, ran a black-market business dealing in diseased human body parts for nearly seven years.

According to the article, the Rathburns were charged earlier this year after investigators say they discovered that the couple from Michigan had been renting out body parts to medical and dental students without disclosing that the parts often were contaminated with diseases.

The article states that the Rathburns were indicted in January on 13 counts, including wire fraud, aiding and abetting, transporting hazardous material and making false statements. Elizabeth recently agreed to a plea deal — she pleaded guilty to wire fraud and agreed to testify against her estranged husband.

Execs allegedly pull a Ponzi to save firm

On March 10, the Securities and Exchange Commission (SEC) charged Aequitas, an Oregon-based investment group, and three top executives with hiding the deteriorating financial condition of its enterprise while raising more than $350 million from investors, according to the SEC release, SEC Charges Oregon-Based Investment Group and Executives With Defrauding Investors.

Aequitas Management LLC and four affiliates allegedly defrauded more than 1,500 investors into believing they were making health care, education and transportation-related investments, but Aequitas actually used their money to save the firm, according to the SEC release. The SEC also alleges that the company used some money from new investors to pay earlier investors.

The SEC's complaint alleges that CEO Robert J. Jesenik and Executive Vice President Brian A. Oliver were aware of Aequitas' poor financial condition yet continued to solicit millions of dollars from investors to pay the firm's expenses and keep the company afloat. Former CFO and COO N. Scott Gillis allegedly concealed the firm's insolvency from investors and was aware that Jesenik and Oliver were continuing to solicit investors to pay operating expenses and repay earlier investors.

According to the SEC's complaint, the executives continued to draw lucrative salaries, used a private jet, and attended posh dinner and golf outings at the expense of investors.