Hedge Fund Trader Neal Goyal Sentenced to 6 Years for stealing $9 million in Ponzi scheme

Hedge Fund Trader Neal Goyal  Sentenced to 6 Years for stealing  more then $9 million in Ponzi scheme.

Neal GoyalThe former head of a Chicago hedge fund firm tearfully apologized to his victims, sobbing as he addressed family members he’d scammed, before he was sentenced Thursday to six years in prison for stealing more than $9 million in a Ponzi scheme.

But some victims who lost their life savings loudly scoffed in the U.S. district courtroom when Neal Goyal, 34, said “every dollar I spent that was not my own made me sick.”

Hedge fund manager’s swank offices concealed a Ponzi scheme
Goyal’s Caldera Investment Group was a Ponzi scheme so brazen that for several years he didn’t even bother to place any trades, according to prosecutors. Most of the money was stolen from family and friends in the tight-knit Hindu community where his parents, both physicians, had long been leaders, even founding a River North community center.

“He made a fool of us, including his parents,” said Dr. Sanjay Thakur, who told the judge Goyal came to his Knoxville, Tenn., home as his father was dying and assured them their money was safe and they could access it to pay for his medical bills. “He said, ‘I have a (law) degree. … Bernie Madoff was not a lawyer.’

“I don’t know how he can sleep every night.”

Another family who had invested more than $1 million — including the son’s college education fund — was told not to worry after they raised fears when their investments consistently beat the market by a wide margin.
“He said, ‘I can’t explain the details of how I do my investments, but you don’t need to worry,'” said Kaushik Mohan, who told the judge he must now take out massive loans to pay for his college education.

ct-neal-goyal-During the eight-year scheme, prosecutors said Goyal spent more than $2 million on luxury car leases, fancy dinners and travel to Hawaii and Tahiti. He, his wife and three children lived in a $1.5 million, five-bedroom Lakeview house overlooking a park. Every morning, he drove a top-of-the-line black Mercedes-Benz to offices on Michigan Avenue with floor-to-ceiling views of the Chicago River and pretended to be a hedge fund manager, according to prosecutors and former employees.
His massive corner office had an L-shaped desk with 10 computer monitors — half of them with trading windows open — yet after 2009 he did no trading on his first set of funds and only limited trading on the others.

“I’m a rotten individual for what I did to (investors). I’m a rotten individual for what I did to my family,” Goyal said Thursday, asking the sentencing judge to have mercy on his family. “I’m a rotten individual.”

But Judge Matthew Kennelly first scolded Goyal for trying to use his family as a shield for his own misdeeds at sentencing.

“If you had given one thought — one thought — to your family during those eight years you would not be standing here now,” Kennelly said. “It’s a little disingenuous to come up here and tell me not to hurt them. You’re the person who put the hurt on them, not me.”
Goyal spent $600,000 on his wife’s two upscale baby goods boutiques, as well as a large cash infusion for Tommy Knuckles, his father-in-law’s failed Lincoln Park tavern, the charges alleged. He even gave employees a gold bar as a reward and rented out a bank vault for an employee Christmas party, prosecutors said.

Just months before Caldera collapsed, he took his entire staff on an all-expenses-paid trip to the Dominican Republic for seven days, their reward for surpassing a remarkable milestone, around 50 percent returns for 2013, according to prosecutors and former employees.

Goyal, his wife, his four employees and their loved ones — 10 in all — went on the trip, renting a yacht, riding dune buggies and enjoying butler service at a five-star resort, the former employees said.

Soon after, the Securities and Exchange Commission called and Goyal told the office that the investment firm was going through a standard audit. Then in May 2014, employees were called into Goyal’s office and told that the SEC had subpoenaed records. Within days, Caldera shut down.

Prosecutors said Goyal had stopped trading entirely on some of his hedge funds beginning in 2009.

Dr. Manisha Thakur told the judge that when her husband Sanjay raised doubts about investing their savings with Goyal, whom they knew because of Goyal’s physician aunts, she reassured him.

“I said, ‘He’s an attorney by profession. I don’t think someone like that would lie.’ And equally important is the family he came from,” she said. “But cold and calculating and essentially a con man is all that it appears Neal was.”

Goyal’s family members told the judge that he didn’t mean to hurt people but got caught up in white lies that snowballed out of control after his fund lost money in its first quarter. They asked for a lesser sentence that would allow him to help raise his children.

“Neal couldn’t admit failure,” his wife Marti told the judge after tearfully apologizing to the victims. “Our goal in life now is to work with our family and repay (the investors).”

Goyal, who pleaded guilty in February to one count of wire fraud, was ordered to pay $9.2 million in restitution, an amount prosecutors said will likely never be repaid.

“(Goyal) used to say everyone should have a son like him,” Sanjay Thakur told the judge. “I don’t know what he’s saying now.”

 

(Visited 280 times, 1 visits today)