Hedge Fund Receives Confiscated Art As Compensation For Fraud

images1New York (HedgeCo.Net) – Hedge fund Heathfield Capital Limited has received eighteen pieces of contemporary art including pieces by Andy Warhol, Mark Rothko and Damien Hirst. The artwork has been valued at approximately $33 million.

The New York-based hedge fund was a victim in a $400 million fraud scheme by Manhattan lawyer Marc Dreier, who was sentenced to 20 years in prison for selling $700 million in fake promissory notes to hedge funds in 2009.

Among the allegations, Dreier allegedly marketed bogus promissory notes that included ones tied to a real estate development company based in New York. Prosecutors said Dreier then covered it up by producing phony documentation and false financial statements to keep the investors from discovering the scheme.

According to the prosecution, Dreier convinced hedge funds to purchase these notes by highlighting the discount they would receive due to the original investors facing a cash crunch brought on by the current economic turmoil. Though the hedge funds weren’t specified, prosecutors say that one New York fund wired $100 million to one of Dreier’s accounts, while another fund in Connecticut wired about $13.5 million.

Alex Akesson
Editor for HedgeCo.net
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