Nov. 18 (Bloomberg) -- William Landberg, the founder of the bankrupt New York-based investment firm West End Financial Advisors LLC, pleaded guilty to a federal charge of securities fraud.
Landberg, 59, was accused by U.S. Attorney Preet Bharara of engaging in a scheme to obtain $8.7 million from the German bank West LB AG for purposes not permitted by the credit agreements. He entered his plea today before U.S. Judge Laura Taylor Swain in Manhattan.
In one of three transactions cited by prosecutors, Landberg received $3.9 million from West LB for a loan to develop property on Long Island in New York. He used $2 million of the proceeds for fund commitments, paid $350,000 to investors as purported earnings and kept more than $100,000 for personal use, the prosecutors said.
“The overwhelming amount of the moneys that Mr. Landberg received as advances from the bank went to other loans related to the fund and we believe that the bank has suffered no loss as a result of Mr. Landberg’s conduct,” Michael Bachner, Landberg’s lawyer, said in an interview after the plea hearing.
Sentencing is set for March 16.
The maximum sentence for the one count against Landberg is 20 years in prison. The sentencing guidelines in the plea agreement range from 78 months to 97 months in prison, or as much as eight years. Landberg also will be ordered to forfeit $8.7 million in assets.
West End Financial filed a plan of liquidation in bankruptcy court in New York in August after seeking Chapter 11 creditor protection in March.
The criminal case is U.S. v. Landberg, 10-cr-00538, U.S. District Court, Southern District of New York (Manhattan). The bankruptcy case is West End Financial Advisors LLC, 11-11152, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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