Those affected by this fraud include a foundation affiliated with Moore Capital Management, the Park Hill Group, family and friends.
Andrew Caspersen the former Wall Street executive has now pleaded guilty of defrauding investors to the tune of $38 million blaming his uncontrollable addiction to gambling for his conduit.
Caspersen, used to work at a unit of Paul Taubman’s PJT Partners Inc, investment bankers, prior to his arrest earlier this year in March. He has pleaded guilty in federal court in Manhattan to securities fraud and wire fraud.
A graduate of Princeton University and Harvard Law School, Caspersen choked up in court as he admitted to cheating mostly family and friends, of what he termed as “simple” fraud.
“It was just a means for me to get money to feed a gambling addition that was all consuming at the time,” said Caspersen.
As part of the plea bargaining, Caspersen, 39, has agreed to not only not appeal any sentence beyond the 15-2/3 years in prison but also to forfeit over $45 million, which his lawyer, Paul Shechtman, said he cannot afford. He is scheduled to for sentencing on November 2.
According to the prosecutors Caspersen, had tried to defraud nearly a dozen investors by claiming that funds their funds will be given as loans to private equity firms. Caspersen is the son of the late Wall Street financier Finn M.W. Caspersen.
Caspersen joined the Park Hill Group in where he worked during his scheme. Incidentally, the firm was spun off from Blackstone Group LP. It is now part of PJT Partners.
Although Caspersen had told his investors, mostly family and friends, that a private equity firm had given him an allocation in a “practically riskless debt instrument” while offering them an investment opportunity.
According to prosecutors, instead of investing the sum he used the $38.5 million to make options trades, which he used to pay earlier investors, and replaced nearly $8 million he had misappropriated from Park Hill Group, which as per Caspersen admission he used for gambling.
According to prosecutors, Caspersen attempted to raise nearly $150 million. His victims include a foundation affiliated with Moore Capital Management, a hedge fund, and one of the fund’s employees, who together were cheated out of $25 million.
Caspersen, also admitted in court to gambling away $20 million of his own money and apologized for harming the people he cared for the most.
“I could not be more sorry or ashamed for my crimes,” he said.
The case is U.S. v. Caspersen, U.S. District Court, Southern District of New York, No. 16-cr-0414.
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