Fake Hedge-Fund Operators Sentenced to 87 Months in Prison for Fraud
Two men who in December admitted to defrauding investors of more than $7 million though bogus hedge funds were each sentenced to 87 months in prison, Manhattan U.S. Attorney Preet Bharara said.
Igor Levin, 41, of Brooklyn, New York, and Yevgeny Shvartsshteyn, 40, of Belle Harbor, New York, each pleaded guilty last year to one count of conspiracy to commit mail and wire fraud. The two said they operated A.R. Capital, a general partner of A.R. Capital Global Fund LP, which they told investors was a hedge fund that invested primarily in equity of international real estate companies, and in oil, gas and other commodities, according to a statement from Bharara’s office.
The U.S. said that in reality, there were no such investments. The defendants instead wired more than $7 million of investor funds to bank accounts in the Ukraine. Levin and Shvartsshteyn received the proceeds from these illegally obtained investments, prosecutors said.
“My client wanted to get this sentence behind him,” Joseph Mure, a lawyer for Shvartsshteyn, said today in a telephone interview.
“Obviously, this occurred during a time in my client’s life when he was having personal difficulties. He’s a totally changed person as a result of this case and wants to get this sentence over and done with so he can get on with his life.”
20-Year Sentences
U.S. District Judge Sidney Stein in New York imposed the sentences upon the two men on March 25, Bharara’s office said.
From February 2006 until September 2006, when the U.S. Securities and Exchange Commission shut down the operation, Levin and Shvartsshteyn controlled ARC Global Fund, Bharara’s office said.
Both men had faced as long as 20 years in prison. As part of their guilty pleas, the men also agreed to forfeit the $7 million in proceeds, Bharara’s office said.
Both men were directed by Stein to surrender to a federal prison designated by the U.S. Bureau of Prisons on April 25, Mure said. Andrew Frisch, a lawyer for Levin, declined to comment.
The case is U.S. v. Levin, 10-CR-00031, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net
To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.
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