Hedge Fund Manager Convicted After ID Theft $2M Stolen Cash and Bank Fraud and Wire Theft

Jury found former hedge fund manager Gerti Muho, 33, guilty in a fraud scheme that landed him more than $2.5 million, which he spent on lavish luxury lifestyle. ID theft, $2 million in stolen cash fueled lavish S. Fla. lifestyle for hedge fund manager, feds say. Muho is a 2012 graduate of the University of California at Berkeley School of Law.

When Gerthi Muho was fired in 2013 from his Wall Street hedge fund job, prosecutors charged he pulled a real-life “Office Space,” stealing all the information on the company’s computer server and trying to siphon millions of dollars from hedge fund bank accounts. (The company, Fletcher Asset Management, faced separate accusations of defrauding investors.)
Using the identities of former employees and interns at Fletcher, Muho created fake identities, according to prosecutors. He defrauded a Monaco bank into wiring him $2 million and also lied his way into a $500,000 business loan, ultimately blowing the money on gambling and luxuries including a 2013 Maserati and a unit at the Marquis building on Biscayne Boulevard in downtown Miami, according to the charges.
He used the fake IDs, including driver’s licenses and identification cards from various states, to escape a civil judgment entered in the Southern District of New York, prosecutors said. He also falsely applied for $250,000 in credit cards and vehicle, business and student loans with numerous banks and other lenders.
When Muho faced eviction from the $775,000 condo, Muho fled to Ridgewood, New York, where he was arrested.
After a three-week trial before U.S. District Judge Beth Bloom, he was convicted of 40 counts of bank and wire fraud, aggravated identity theft and money laundering. His sentencing is set for Sept. 26.

He traveled, gambled and had an affinity for shiny objects: a Rolex watch, two Maseratis and a bright orange Jaguar convertible.

He also bought a luxury downtown Miami condo in a $775,000 all-cash deal, investigators say.

But Gerti Muho’s high-flying lifestyle was fueled by lies, stolen identities and more than $2 million in stolen cash, federal prosecutors say.

His adventure came to an end when, after spending a few months on the lam, he was captured by federal agents at his mother’s home in Queens, N.Y., authorities said. They recently moved him to the Broward County Jail, and he will remain locked up until his trial.

Muho, 32, had left South Florida in January, records show, after he was arrested on relatively minor state charges, accused of using someone else’s identity to apply for an $800 payday loan at an Amscot store.

Gerti Muho
Gerti Muho, 32, is accused of masterminding a string of frauds in Broward and Miami-Dade counties. The former hedge-fund manager is jailed in Broward County pending trial.

That arrest apparently was a fluke: Federal authorities already were investigating allegations that Muho pulled off an extraordinarily broad range of financial crimes in Broward and Miami-Dade counties between April 2013 and May this year.

He was indicted on 36 federal charges days after his arrest.

The loss amount, so far, is estimated at between $1.5 million and $3 million, court records show.

He is expected to plead not guilty to multiple counts of bank fraud, aggravated identity theft and wire fraud early next month in federal court in Fort Lauderdale. The most serious charges carry a maximum penalty of 30 years in federal prison.

 

Gerti Muho, 32, pictured after his January 2016 arrest in Miami-Dade County on grand theft charges.

“At this moment, there is no comment for us to make,” Muho’s lawyer, Michael J. Rosen, told the Sun Sentinel.

Handcuffed, shackled and dressed in a green-striped jail jumpsuit, Muho answered a judge’s questions with a polite “Yes, Your Honor” during a court appearance Wednesday in Fort Lauderdale.

Muho’s fraud began when he worked as a hedge-fund manager at Fletcher Asset Management in New York from June 2012 to April 2013, when he was fired, investigators said.

Muho’s job gave him access to sensitive information, and investigators said he abused that trust.

“Law enforcement learned that Muho, during late 2012, copied and retained the company’s [computer] server files, which contained voluminous personal and financial identifying information of employees, clients, subsidiaries and others,” agents from the U.S. Postal Inspection Service and the FBI wrote in court records.

A few months after he was fired, Muho moved to South Florida and illegally arranged the $2 million transfer from the Monaco bank account of one of his former investment fund clients to at least two bank accounts under his control in August 2013, authorities said.

Muho spent about $775,000 of the stolen cash to buy a condo at the Marquis Residences, an ultra-luxury building on Biscayne Boulevard that overlooks AmericanAirlines Arena and the Pérez Art Museum in September 2013, authorities said. He used the name Blue 5303 Land Trust to disguise the fraud, they said.

Muho used another $900,000 on a 2013 Maserati GT, gambling, paying off personal credit card debts and other expenses, Assistant U.S. Attorney Sean McLaughlin wrote in the indictment.

The investment fund victims sued to freeze about $400,000 that remained in Muho’s accounts and eventually won a civil judgment against him for the full loss, plus interest.

Muho, who was also known by several aliases including Gerard Peter Morgan, Enton Penguli and Kris Blair, began using stolen identities to commit a series of frauds and to deposit counterfeit checks, according to the criminal charges.

About a year later, Muho, posing as Gerard Morgan, fraudulently obtained a $500,000 mortgage loan, using equity in the Miami condo as collateral for the loan, investigators said.

He spent much of that money on gambling, travel and other purchases and defaulted on the loan, they said. The lender later foreclosed and sold the condo.

In 2015, investigators say Muho used the Gerard Morgan name again to get a $38,000 credit union auto loan to pay for the orange Jaguar. Muho traded in the Maserati GT, claimed he earned $220,000 a year and used a fake Social Security number and bogus IRS records to obtain the loan, according to the charges. He later stopped making the loan payments.

Muho also posed as other people to open several accounts, deposit fake checks and obtain lines of credit at banks in Sunrise, Cooper City, Miami and Sunny Isles in late 2015, investigators said.

Around the same time, Muho used other people’s identities to apply for more than $185,000 worth of student, auto, personal and credit card loans, according to the charges. He also bought a Rolex watch using a $7,700 consumer loan obtained by lying, authorities said.

Court records in the criminal case provide few hints about Muho’s potential motives or his defense against the charges.

Muho graduated with a law degree from the University of California, Berkeley, in 2012 but failed the California Bar exams twice and is not licensed to practice law, according to court records. Though he is not a lawyer, he has been allowed to represent himself in a series of civil lawsuits he filed in disputes linked to his former hedge-fund role.

His lengthy and numerous civil lawsuits and bankruptcy filings in South Florida, New York, Delaware and California in recent years have been unpersuasive to judges: All of the cases have been dismissed or are under appeal, according to prosecutors.

“This claim is frivolous … [Muho’s] claim is incoherent and incomprehensible,” Chief U.S. District Judge K. Michael Moore wrote in a February 2014 order rejecting one of Muho’s civil suits in federal court in Miami.

The distinctive orange Jaguar F-type convertible apparently helped lead to Muho’s downfall.

After he fled South Florida in January, investigators said they tracked a Verizon internet service signal they thought he was using to continue committing fraud.

When postal inspection agents traced that internet signal to his mother’s home in the Ridgewood section of Queens, N.Y., they spotted his Jaguar parked outside the house and he was arrested a short time later.

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