Yesterday afternoon, federal prosecutors charged Fredrick Douglas Scott, the self-described "youngest African-American hedge fund founder in history," with engaging "in a wire fraud conspiracy to steal hundreds of thousands of dollars from investors1," which he used to buy Caramel Macchiatos, stay in hotels with views of the Holland Tunnel, and bail his friends out of jail.2 At this time, there appear to be several inconsistencies with the stories Scott has told clients and friends, which include:
- The claim he manages $3.7 billion.
- The claim he makes $96,000/year ("[Scott] filled out a financial affidavit claiming his salary is $96,000. Scott then told pretrial services he makes $200,000 but takes home only $50,000 a year, prosecutors said. Scott’s personal account at TD Bank showed over $700,000 “flowing in and out,” but as of April 30 his ACI Capital Group account was overdrawn by $91.24.")
- The claim his in-laws were his get out of jail free card ("Scott [has said] his wife's parents have 'Italian diplomatic status,' and he boasted to the FBI that if he got in trouble, she would be his 'ace in the hole.'")
Will we find out that the above weren't so much lies as misunderstandings in the days to follow? Maybe! At this time, however, the most pressing issue Scott may want to resolve would be that of his representation, which is currently not returning his calls.
Scott complained to the judge that he couldn’t understand why his lawyers from the white-shoe firm Wilkie Farr and Gallagher weren’t present on Tuesday. The prosecutor said he received a call from the firm saying they did not intend to represent Scott.
Fredrick D. Scott [LinkedIn]
29-year-old 'financial wizard' fleeced investors out of at least $750,000 [NYDN]
Chief Executive Officer Of ACI Capital Group Charged With Wire Fraud [Justice]
1."He lured one victim of his scam to hear him speak at the Rev. Al Sharpton’s National Action Network conference in March, according to court papers." Others were likely reeled in by the photos on Scott's website of him "schmoozing with Knicks great Patrick Ewing, Brooklyn City Councilman Jumaane Williams and Martin Gruenberg, the chairman of the FDIC."
2."Bank records show that Scott used client funds to purchase personal items at Louis Vuitton, the Apple Store, Starbucks, Fair Bail Bonds, True Religion Jeans, Tao Restaurant, the Hampton Inn SoHo, and Dizzy's Coca-Cola Club, among others."