Wed, Mar 30, 2016 - Page 15 News List

Ex-executive charged in US$95m fraud scheme


An Ivy League-educated former executive at a New York investment bank was arrested on Monday on charges he tried to defraud investors of more than US$95 million as he led what a prosecutor called a “shameful charade” to cover his tracks.

Prosecutors said Andrew Caspersen, 39, got away with only US$25 million. He was charged in Manhattan federal court with securities and wire fraud after his Saturday arrest. He is accused of scamming clients of PJT Partners Inc into investing millions of dollars in sham private equity investments from July through March. After an initial court appearance, he was released on US$5 million bail.

Dan Levy, a lawyer for Caspersen, declined comment outside court.

Caspersen has homes in New York City and suburban Bronxville, New York. He is the son of Finn M.W. Caspersen, a prominent philanthropist and former chief executive of the financial services firm Beneficial Corp. The elder Caspersen was found dead in 2009 of what authorities said was a self-inflicted gunshot wound.

PJT Partners released a statement saying it was “stunned and outraged” to discover the fraud while Caspersen was a partner in its Park Hill Group.

It said it referred the matter to federal prosecutors after learning facts suggesting improper behavior.

“To advance his US$95 million fraud scheme, Caspersen allegedly put on a shameful charade — creating fake e-mail addresses, setting up misleading domain names and inventing fictional financiers,” US Attorney Preet Bharara said in a press statement. “When confronted by a suspicious client who had invested US$25 million, Caspersen had no good answers.”

The Securities and Exchange Commission (SEC) also filed civil charges against Caspersen, seeking a return of ill-gotten gains with interest and monetary penalties. It said that after graduating from Princeton University in 1999 and Harvard Law School in 2002, Caspersen was a principal at a private equity firm in London, before he became a managing principal in January 2013 at the New York firm.

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

Caspersen could face up to 40 years in prison.

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