Camelot Group’s Penn Gets Prison for $9.3 Million Theft

Lawrence E. Penn III, the founder and managing director of investment advisory firm Camelot Group, was sentenced to as long as six years behind bars for stealing more than $9.3 million from private-equity investors.

Starting in 2010, Penn, 45, secretly transferred the funds to a shell company after raising $120 million from investors including a Kentucky pension fund, Manhattan District Attorney Cyrus Vance Jr. said in a statement Monday. He will serve between two years and six years in prison, Vance said.

“This case has an element of severe heartbreak given the fact that Mr. Penn is a West Point graduate who was never involved in any criminal activity prior to this case,” Penn’s lawyer, Benjamin Brafman, said in a phone interview.

Penn, of New York, was also ordered to pay restitution of about $8.3 million and to forfeit his company’s interest in the Manhattan-based fund that he used in the scheme, Camelot Acquisitions, Vance said. The fund invested in private-equity companies on the verge of going public, he said.

A longtime friend, Altura St. Michael Ewers, 44, of San Francisco, was sentenced in March to as long as three years in prison after confessing and agreeing to pay $319,000, according to the statement.

“Instead of using investors’ funds for due diligence services as they claimed, these defendants lined their own pockets,” Vance said in the statement.

The two men, indicted in February 2014, used the shell company to launder money through entities and accounts they controlled, with Penn using the funds for credit-card payments, withdrawals of cash and a car. The men also made false statements and gave auditors fake invoices, authorities said.

Penn pleaded guilty to two charges including grand larceny in the first degree, Brafman said. Vance had asked the judge to impose a sentence of five years, he said.

The case is People v. Penn, 73-2014, New York State Supreme Court, New York County (Manhattan).

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