A former Wall Street executive has pleaded guilty to defrauding investors out of US$38 million, blaming his conduct on a gambling addiction.
Andrew Caspersen, who worked at a unit of investment banker Paul Taubman’s PJT Partners Inc. prior to his arrest in March, appeared in federal court in Manhattan n charges of securities fraud and wire fraud, Reuters reports.
Caspersen, a Princeton University and Harvard Law School graduate, admitted to cheating numerous people, mostly family and friends, through what he called a “simple” fraud.
“It was just a means for me to get money to feed a gambling addition that was all consuming at the time,” Caspersen said.
As part of a plea deal, Caspersen, 39, agreed to not appeal any sentence beyond 15-2/3 years in prison and to forfeit US$45 million.
His lawer said he cannot afford that sum. He is scheduled to be sentenced on Nov. 2.
Prosecutors said Caspersen, the son of late Wall Street financier Finn M.W. Caspersen, from November 2014 to March 2016 tried to defraud more than a dozen investors by claiming he would use their funds to make loans to private equity firms.
During the scheme, Caspersen worked at Park Hill Group, which he joined in 2013.
The advisory firm was spun off from private equity group Blackstone Group LP in October and is now part of PJT Partners.
In court, Caspersen said he told friends and family that a private equity firm had given him an allocation in a “practically riskless debt instrument” and then offered them a chance to invest with him.
Instead, prosecutors said he used the US$38.5 million he raised to make options trades, to pay earlier investors, and to replace more than US$8 million he had misappropriated from Park Hill Group, which Caspersen said he also used for gambling.
In total, he attempted to raise almost US$150 million, prosecutors said.
His victims included a foundation affiliated with hedge fund Moore Capital Management and one of the fund’s employees, who together were cheated out of US$25 million, prosecutors said.
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