Alleged ‘Coke-Addicted Liar’ Former Hedge Fund Manager Bracing For Pretty Rough Cross-Examination

Steve Maiden hopes to get the gang back together behind bars.
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By Davidfernandocoronel (Own work) [CC BY-SA 3.0], via Wikimedia Commons

By Davidfernandocoronel (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Here’s the good news for former hedge fund manager Stephen Maiden: He’s getting out of jail. One day (or two or three if he plays his cards right) in the next few weeks, he’ll get to change out of his orange jumpsuit and into a nice suit, take a nice ride over an East River bridge and sit in a relatively comfortable chair. The bad news is that when he’s done he has to go back to the Metropolitan Detention Center in Brooklyn for another four years—on account of the $9 million Ponzi scheme—and while he’s in that relatively comfy chair, he’s gonna have to listen to things like this.

Maiden is a "cocaine-addicted fraudster and admitted liar," Amanat’s attorney Randall Jackson told jurors during his opening statement. "The government’s star witness took his clients’ money and blamed his gambles on Omar…"

"Mr. Maiden wants to get out of prison," McRae said in his opening remarks. "The fraud in this case was hidden from Kaleil."

“Omar” is Omar Amanat, “the most powerful person in Hollywood you’ve never heard of” and aggrieved Hamptons homeowner, and “Kaleil” is Kaleil Isaza Tuzman, the former CEO of video software outfit KIT Digital. Their lawyers are saying these things about Maiden because Maiden plans to testify that the threesome dabbled in a little market manipulation, accounting hijinks and hedge-fund fraud to prop up both KIT and another hedge fund—not Maiden’s—run by Amanat’s brother. The same lawyers say that Amanat and Tuzman are innocent visionaries and entrepreneurs who were innocently victimized by the financial crisis and by the aforementioned “coke-addicted fraudster and admitted liar.”

It is unclear whether prosecutors plan to bring up the legendary story of the “Sprayathon” house party hosted by a former Moore Capital Management trader at Amanat’s $20 million Bridgehampton digs, and said host’s allegation that Amanat was trying to shake him down over it. But they are certainly going to discuss Amanat’s penchant for less-than-subtle-and-advisable use of electronic messaging also evident in the earlier incident.

Jurors were told they’d also see evidence of phony financial statements and numerous discussions about the frauds in text messages and emails exchanged between Amanat, Tuzman and Maiden.

In one such message, Amanat wrote to Maiden that Tuzman needs to realize "it doesn’t matter who did what" if investors realize the money is gone, Assistant U.S. Attorney Joshua Naftalis told the jury. Amanat then made a reference to "criminal behavior, jail time," Naftalis said.

"It doesn’t get more devastating than that," the prosecutor said.

Jailed Hedge Fund Founder Is Star Witness in Amanat Fraud Trial [Bloomberg]

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