White-Collar Crime

Feds: Law grad at finance firm stole $25M, sought $70M in 'brazen fraud'

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A Harvard Law School graduate is facing federal fraud charges for allegedly stealing $25 million from investors and seeking $70 million more under false pretenses while working as an executive at a financial advisory firm.

Andrew Caspersen, 39, is accused of duping a charitable foundation and a hedge fund employee into giving him $25 million to invest in what was supposed to be a secured loan to a private equity fund. Instead he stole—and lost—most of the money, using it for aggressive options trading and stock purchases in his own brokerage account, prosecutors say. He was charged with securities fraud and wire fraud in the Manhattan case, the feds announced Monday.

Bloomberg, the New York Times’ DealBook blog, Reuters and the Wall Street Journal (sub. req.) have stories.

“As alleged, Caspersen engaged in a brazen fraud by raising money under false pretenses and simply stealing the funds,” Andrew Calamari told the New York Times. He serves as director of the New York office of the U.S. Securities and Exchange Commission.

PJT Partners Inc. said it was “stunned and outraged” to learn of misconduct by the managing director at its Park Hill Group unit. The company said it conducted an internal investigation, fired Caspersen and reported the situation to authorities.

A parallel civil suit by the SEC is also underway. It says Caspersen tried to pull off a scheme by creating a similar-sounding shell company that was easily confused with a legitimate private equity fund, Reuters reports.

“To advance his $95 million fraud scheme, Caspersen allegedly put on a shameful charade—creating fake email addresses, setting up misleading domain names, and inventing fictional financiers,” said U.S. Attorney Preet Bharara in a written statement. “When confronted by a suspicious client who had invested $25 million, Caspersen had no good answers.”

Attorney Daniel Levy, who represents Caspersen, was not immediately available for comment, according to Reuters and the Times.

See also:

ABAJournal.com: “Harvard Law Donor Faced $100M Tax Probe at Time of Suicide, Source Says”

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