March 18 (Bloomberg) -- William Landberg, the founder of the bankrupt New York-based investment firm West End Financial Advisors LLC, was sentenced to three and a half years in prison for his role in an $8.7 million fraud scheme.
Landberg, 61, of New York, pleaded guilty in 2011 in federal court in Manhattan to a scheme in which he obtained the money from the German bank West LB AG for purposes not permitted by credit agreements.
West End was a boutique financial services firm that specialized in alternative investment opportunities for institutions and high net worth clients, the U.S. said.
In one of three transactions cited by prosecutors, Landberg received $3.9 million from West LB for a loan to develop property on New York’s Long Island. 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, prosecutors said.
As part of the sentence, U.S. District Judge Laura Taylor Swain, who presided over the case, today ordered Landberg to serve 18 months of home confinement and to forfeit $8.7 million he obtained as a result of the scheme. She also ordered him to pay $1.13 million in restitution.
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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