Over the past 10 years, Lawrence Herzing needed a few extra bucks. Certainly, in those turbulent times, he was not alone. But he was controller of a $4 billion hedge fund, which gave him somewhat ready access to those extra bucks, access which he allegedly used 32 times to the tune of $12 million. While this undoubtedly helped Herzing’s cash-flow problems, it also has the drawback of being quite illegal, as Herzing discovered when a couple of FBI agents showed up at his $2.6 million Greenwich home with a pair of handcuffs.
The wire transfer instructions "did not correspond to any legitimate payments or investments necessary to Contrarian Capital's business…."
Herzing was charged with one count of wire fraud, which carries a maximum 20-year prison term, according to a statement from U.S. Attorney Deirdre Daly in Connecticut.