Hedge Fund Fraudster to Pay $300 Million Back to Investors
Wednesday, August 20, 2008 : PermalinkNew York (HedgeCo.Net) – Paul Eustace, former head of Philadelphia Alternative Asset Management Company, has been ordered to pay back nearly $300 thanks to his fraudulent ways.
According to a statement by the Commodity Futures Trading Commission, the Canadian resident was able to swindle clients by constructing false account statements and exaggerating the fund’s portfolio worth.
Prosecutors alleged that Eustace was able to hide losses from his clientele while the fund experienced trouble from October 2002 to May 2005, when the fund collapsed. He has been indicted on two criminal counts of commodities fraud.
Philadelphia Alternative Asset Management was a commodity fund that was peddled as a hedge fund. Eustace was able to raise about $230 million, despite the fact that his company never traded options or futures on the investor’s behalf.
The Philadelphia-based law firm of Stradley, Ronon, Stevens & Young will act as the collector and has already recovered $96 million. In addition to returning the money to investors, Eustace has also been ordered to cough up $12 million in civil penalities.
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
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