New York (HedgeCo.net) – Former New York hedge fund manager, Guy Albert de Chimay, pleaded guilty this week to grand larceny and running a $7 million Ponzi scheme. He was arrested in June, 2010, in North Carolina and charged with securities fraud.
“This case is a classic example of the type of financial criminal activity that exploded in an era of selfishness,” Manhattan District Attorney Cyrus Vance said, according to FINalternatives. “The defendant used his distant connection to the Chimay royal family to gain the trust of his victims—his friends—before ripping them off.”
Chimay was originally accused of stealing $6 million from high net worth and institutional investors. He has been charged by the SEC with using a bridge-loan facility he had set up in order to run a multi-million-dollar Ponzi scheme.
The SEC said that the investor money also was fraudulently used to pay Chimay’s massive credit card bills as well as Chimay Capital’s rent and payroll, and to pay off disgruntled counterparties in Chimay’s other business ventures.
In December 2009, Chimay sought a multi-million dollar bank loan on the basis of false representations that he had $13 million in liquid assets in a Bermuda bank account. The account balance was actually zero.
“There is no evidence that any bridge loans were actually made, and investments were instead used to make mortgage payments on Chimay’s multi-million dollar home in the Hamptons and pay more than $500,000 to the law firm representing Chimay in a divorce proceeding.” The SEC said.
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