$12 Million Fraud: Over 5 Years In Jail For Hedge Fund Manager

Preet Bharara describes insider trading charges against Joseph "Chip" Skowron during a news conference in New YorkNew York (HedgeCo.Net) – A NY hedge fund manager was sentenced to 5 and a half years in prison for defrauding investors in a $12 million scheme, Reuters reports this morning.

Lloyd Barringer pled guilty in July 2013 to four counts of fraud: securities fraud, conspiracy to commit securities fraud, mail fraud, and conspiracy to commit mail fraud.

The charges stem from his operation of the Gaffken & Barriger Fund LLC, which was based in Monticello, Sullivan County, New York. Barriger was the president of the hedge fund and the principal shareholder, director, and officer of G&B Partners, Inc., the fund’s managing member and sole common shareholder. He surrendered to the FBI in May 2011.

“Once again, belief in hedge funds by hopeful investors proved to be sadly misplaced,” Attorney Preet Bharara said, “Investors entrusted their hard-earned dollars to Lloyd Barringer, believing his promises that their savings would be safe and secure in his fund. But, as we have alleged, they were sorely mistaken. Even as problems with the fund multiplied, Barriger allegedly continued to lure investors in with his misinformation.”

Barringer raised approximately $12.6 million while lying to investors about the fund’s financial condition, according to federal prosecutors. They will seek the whole amount in forfeited assets.

The hedge fund manager faced a maximum sentence of 20 years in prison on each count. The Judge also ordered Barriger to forfeit $12.38 million and pay $9.37 million in restitution.

Alex Akesson
Editor for HedgeCo.net
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