Alan Fishman, the limo driver-cum-hedge fund manager president who admitted last year to screwing AR Capital investors just a little bit, has pleaded guilty to fraud (Fishman had caught the investing bug while driving around a bunch of investment bankers and lawyers, and decided one day to "take a crack at his customers’ game").
A gentleman named Gary Gelman, who is Mr. Fishman’s nephew, was trying to launch a hedge fund. Although Mr. Fishman had no prior experience managing money, in 2003 he became president of the A.R. Capital Global Fund, which operated from a small office on 39 Broadway in lower Manhattan. Using cold calls, the fund lured in 70 clients who invested about $20 million.
The fund managers told investors they would buy shares in overseas real estate companies and trade currencies, oil, gas and other commodities while using “active, leveraged trading” and “fundamental and technical analysis” to make money. None of this was true, according to prosecutors. Instead, client money was invested in three Ukrainian stocks or parked in a Ukrainian money market fund. Millions more were wired to bank accounts in Lithuania, including one held by a company located in St. Kitts and Nevis.
Everything was going pretty okay until one rat-bastard of a client had to come to New York and request a meeting, which was held in a deli. That's when things started to go downhill. Now, Crain's reports, Fishman has pleaded guilty to conspiracy to commit securities fraud (and is scheduled to be sentenced on June 18), and has ruined it for all the legit cabbie turned hedge fund managers out there. One bad seed-- all it takes.
Limo driver-turned-hedge fund fraudster admits guilt [Crain's via BI]