FOXBusiness- With record losses from the subprime and credit crisis veering towards the $400 bn mark, here come the market police.

In the crosshairs: Hedge funds, including the indictments of the two Bear Stearns hedge fund managers.

A senior law enforcement official said in an interview that hedge funds now sit at the top of the hit list of federal investigations into the subprime crisis, including at the Department of Justice and the Federal Bureau of Investigation. Expect more announcements of hedge fund indictments in coming days, sources say.

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West Palm Beach (HedgeCo.net)- Kirk Wright’s Atlanta-based hedge fund company, International Management Associates, was found to be fraudlent leading to the conviction of the manager, Wright, as the Department of Justice unsealed a March 10 criminal complaint against him.

"The complaint alleges a fraud involving $150 million to $180 million in missing investor assets managed by Wright’s funds, International Management Associates and International Management Associates Advisory Group," said U.S. Attorney David Nahmias in a statement.

The federal complaint charges mail fraud, executed by mailing a set of false asset statements to IMA investor Stephen Atwater. The charge carries a maximum sentence of 20 years in prison and a fine of up to $250,000 on conviction.

According to authorities, Wright and his company collected more than $150 million spread across thousands of client accounts since 1997 and used false statements and documents to mislead some of them to believe the value of those investments was increasing.

Sentencing is set for August 26.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

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