New York (HedgeCo.Net) – A New York fund manager was sentenced yesterday to three years and ten months of prison time for stealing $2.9 million from hedge fund investors in a Ponzi scheme, Reuters reports.
Jason Konior, the founder and manager of a number of related business entities in New York City, collectively referred to as “Absolute,” pled guilty in Manhattan federal court in connection with his operation of a multi-million-dollar Ponzi scheme in which he stole at least $2.9 million from small hedge fund investors and used the funds to pay off prior investors and to pay himself. Konior was originally charged in February 2013 and pled guilty before U.S. District Judge Alvin K. Hellerstein.
“In the space of less than a year, Jason Konior managed to take at least $2.9 million that he had solicited from his investors and then use it to settle up with previous investors and to pay himself.” Manhattan U.S. Attorney Preet Bharara said.
The sentence is to be followed by three years probation. The judge also ordered Konior to forfeit $2.9 million.
“Konior founded Absolute Fund LP in 2006, offering hedge funds and other investors the ability to trade securities with leverage greater than they would be able to receive on their own.” Reuters said. “Konior admitted that in soliciting new investments from hedge funds he failed to disclose the loss and used part of their capital contributions to pay old investors who were demanding redemptions. A Ponzi scheme is one in which the operator pays returns from capital paid by new investors instead of from profits.”
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