Financier Accused of Faking Investments Charged in a $95 Million Scheme

Private Equity Executive Andrew Caspersen Accused of Faking Investments Charged in a $95 Million Scheme.

Andrew Caspersen departs after a hearing at the U.S. Federal Court in New YorkAndrew Caspersen, a partner at the Park Hill Group, an advisory firm that until last fall had been a part of the Blackstone Group’s advisory business, has been accused of seeking to defraud a number of institutional investors of $95 million through fake private equity investments.

One investor duped by Mr. Caspersen was a charitable foundation affiliated with an unidentified New York hedge fund that sank nearly $25 million in the scheme. An employee at the hedge fund firm invested $400,000 with Mr. Caspersen.

But the authorities said Mr. Caspersen used most of that money to make a series of money-losing stock and options trades in his personal brokerage account.

“As alleged, Caspersen engaged in a brazen fraud by raising money under false pretenses and simply stealing the funds,” said Andrew M. Calamari, director of the Securities and Exchange Commission’s New York office. “This action amply demonstrates that even sophisticated institutional investors are not immune to financial scams.”

Federal prosecutors working for Preet Bharara, the United States attorney in Manhattan, charged Mr. Caspersen in a criminal complaint with securities fraud and wire fraud. Mr. Caspersen had yet to be arraigned on the charges as of Monday afternoon.

rAndrew CaspersenPJT Partners, the firm run by the investment banker Paul J. Taubman that now owns Park Hill, said in a statement that it had “terminated” Mr. Caspersen and was cooperating with authorities. The firm said that after learning of potential improper behavior by Mr. Caspersen, it conducted an internal investigation and reported the matter to federal prosecutors in Manhattan.
The S.E.C. said that Andrew Caspersen, a partner at Park Hill, solicited $95 million to invest in a shell company.
“Since the inception of our firm, an unconditional principle of integrity has been a core value as we build a lasting franchise,” said the statement from PJT Partners. “Our commitment to clients begins and ends with honesty and transparency, and strict adherence to these values is the absolute cornerstone of our firm.”

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Shares of PJT Partners were down more than 12 percent in mid-afternoon trading.

Mr. Caspersen’s lawyer, Daniel Levy, was not immediately available for comment.

Mr. Caspersen is a son of Finn M. W. Caspersen, a Wall Street financier and philanthropist who committed suicide in 2009. He was battling cancer at the time, and his name had become embroiled in an overseas tax evasion investigation.

Federal authorities said the scheme began last summer and ended only a few weeks ago. The S.E.C. said in its complaint that Mr. Caspersen had raised money through a fake investment vehicle he set up that sounded similar to the name of an actual investment vehicle, which also was a client of Park Hill.

Mr. Caspersen began raising money for his own investment vehicle at the same time that Park Hill was raising $500 million for its legitimate investment structure. It appeared that Mr. Caspersen was seeking to confuse potential investors with the similar-sounding name.

Mr. Caspersen made up email accounts and invented employees and even went as far as to create a fake domain name, the authorities said.

But the scheme began to break down this month when the foundation affiliated with the hedge fund asked on March 11 for its $25 million to be returned.

A few days later, on March 14, Park Hill learned that Mr. Caspersen was raising money for his own investment vehicle when an unidentified firm complained about it. Park Hill then hired lawyers from Paul, Weiss, Rifkind, Wharton & Garrison to conduct an internal investigation. The law firm notified federal prosecutors of its findings the next day.

By March 18, the authorities said the account to which the hedge fund’s foundation had wired its $25 million had a balance of about $40,000.

 

Read More: NY Times

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