White-Collar Crime

Ex hedge-fund honcho who hid computer in ceiling of his lawyer's office convicted of fraud

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A former hedge fund manager, while defending himself against 22 felony charges in a federal case related to multiple fraud schemes, hid a tablet computer in the ceiling of his lawyer’s office, a San Francisco jury found Tuesday.

It convicted James Michael Murray, 45, of contempt for hiding the computer, as well as the other 22 counts, including charges of wire fraud, money laundering and identity theft, reports Bay City News.

The indictment against Murray said he defrauded investors in the hedge fund, Market Neutral Trading LLC, of $2.5 million between 2011 and 2012 through misleading marketing. It also said Murray cheated credit card companies out of $550,000 by processing sham transactions for the hedge fund.

After he was charged in 2012, Murray lived in a halfway house but was allowed to leave to meet with his lawyer. A court order said he could not use a cellphone or the Internet and could not execute securities trades.

The computer Murray was assigned at Pillsbury Winthrop Shaw Pittman did not have Web access. However, the FBI executed a search warrant and found the tablet hidden above ceiling tiles in a small conference room he was allowed to use at the law firm, the Marin Independent Journal reported last year. The search was sparked by a tip from a fellow halfway house resident, who said he had bought the tablet for Murray at Murray’s request, the newspaper explained.

An FBI agent said in an affidavit that the fellow resident said Murray told him he was able to access the Internet using the law firm’s wifi. Murray allegedly used the tablet computer to execute trades with $25,000 wired to his account by an investor with whom he’d previously had dealings and send email requesting a price quote for a one-way private jet flight from San Francisco to Switzerland.

The Bay City News says Murray used the computer while working alone in the law firm conference room between August 2013 and February 2014.

A spokesman for the law firm declined to comment last year, saying that it could not discuss the tablet even though Pillsbury Winthrop no longer represented Murray, the Marin Independent Journal reports. The firm had been appointed by the court under a pro bono program to represent Murray because he reportedly had no funds.

A civil suit against Murray by the U.S. Securities and Exchange Commission is ongoing.

His sentencing in the criminal case is set for January. Murray’s current lawyer was not immediately available to comment on his conviction, the Bay City News says.

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