New York (HedgeCo.Net) – Cincinnati hedge fund manager Glen Galemmo has been accused in court filings of orchestrating a classic Ponzi scheme in which he used moneys from certain investors to pay “investment returns” to earlier investors.
The scheme cost investors “tens if not hundreds of millions of dollars,” according to a lawsuit filed in Hamilton County Common Pleas Court, the Cincinnati Business Courier reports.
Law firm Dimond Kaplan & Rothstein reported: As part of his scheme, Galemmo reported double and triple-digit investment returns that are now believed to have been false. As just one example, from 2006 through 2011, Galemmo claimed investment returns totaling over 400%. It appears that those “returns” were greatly exaggerated.
Galemmo and Queen City operated out of Cincinnati, Ohio, and many of those who invested with them and suffered losses live in the surrounding area. In addition, Galemmo may have maintained offices and solicited investors in Sarasota, Florida and its surrounding areas.
On July 17, 2013, Galemmo e-mailed investors that Queen City no longer will be in operation. Galemmo further requested that investors not visit Queen City’s Cincinnati, Ohio office, and that any inquiries should be directed to the Internal Revenue Service. On information and belief, the federal government already had raided Queen City’s office and seized all of Queen City’s assets.
Galemmo was a trustee to the LCM Landmark Series Trust (the “Trust”). Two LCM Landmark Funds (the “Funds”) were organized under the Trust. The investment advisor to the Funds was Landmark Capital Management, Inc.
Plaintiffs in the case are organized into two trusts — Galemmo Victims Fund I and Galemmo Victims Fund II. Their attorney, Brian O’Connor of Cincinnati law firm Santen & Hughes, declined comment. Galemmo couldn’t be reached for comment and neither could his attorney.
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