New York (HedgeCo.Net) – Hedge fund fraudster Salman Shariff has been sentenced to 57 months behind bars, years after swindling millions from trusting investors.
The Miami-based funds raked in almost $11 million from 1998 to 2001, while Shariff afforded himself all of the luxuries indigenous to South Florida, including an oceanfront South Beach condo, a Ferrari Testarossa and a 43-foot yacht. Shariff also purchased a modeling agency and gave it to his girlfriend to run.
Shariff had admitted guilt at his plea hearing earlier this summer. The ponzi-like scheme took place within several funds, including Vestron Investment Club and Crescent Capital.
Ponzi-schemes are commonly found in cases of hedge fund fraud. They involve using new capital coming in to pay “returns” to existing investors. Investors are usually duped into thinking the fund is posting admirable returns, when in fact, the fund is probably suffering.
Shariff admitted to exaggerating the performance of his funds in order to present them in a favorable light. When the fund was experiencing sharp losses, Shariff claimed it was posting returns between 58 and 86 percent.
Shariff had been on the run until February, when FBI agents tracked him down in Queens. In addition to his sentence, U.S. District Court Judge Federico A. Moreno insisted on an extra three years of supervised release.
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