New York (HedgeCo.Net) – Lawrence Herzing, the the former controller of hedge fund Contrarian Capital Management has pleaded guilty to one count of wire fraud stemming from his theft of more than $9 million from Contrarian, Reuters reports.
Contrarian Capital Management said in a statement to Bloomberg that no current or former clients would be affected by Herzing’s activity.
The Department of Justice said that on 32 occasions between 2004 and 2013, Herzing used his position to wire $9,202,417.54 from his employer to accounts that he controlled. He was arrested on October 29, 2014, and currently is released on a $5.6 million bond.
Herzing’s sentencing is scheduled for April 24, 2015, at which time he faces a maximum term of imprisonment of 20 years, a fine and an order of restitution. Herzing also has agreed to forfeit his residence and approximately $1.8 million.
Contrarian Capital Management’s portfolio invests in global distressed opportunities including; bank debt, trade claims, senior bonds, debt backed by real estate, direct “rescue” financing, and post reorganized equity.
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