West Palm Beach (HedgeCo.Net) – Two men involved in a hedge fund scam that defrauded investors out of $6 million were sentenced yesterday in Los Angeles. Keith Gilabert, 33, of Valencia, CA, will serve the maximum five year prison sentence and pay $1 million in restitution. <\/p>\n
Gilabert ran a hedge fund called GLT Venture Fund through his company, Capital Management Group. With the help of Justin Paperny, 32, an ex-broker at UBS AG, Gilabert was able to convince investors to hand over large sums of money by fabricating numbers and making false claims. <\/p>\n
Paperny admitted to taking kickbacks from Gilabert in the amount of $65,000 and lying to investors about the performance history of the GLT fund, and the risk associated with investing in it. In addition to the kickbacks, Paperny received about $155,000 in commissions for GLT trades he made through UBS. For his role, Paperny was sentenced to 18 months in prison, and ordered to pay just over $510,000 in restitution. <\/p>\n
Gilabert claimed the GLT fund earned annual returns of 27 percent, which was far from the truth. The fund actually lost $7 million and distributed about $4.6 million falsely labeled as profits in what turned out to be a Ponzi-like scheme. Gilabert also used $2.5 million of that money for his own personal use. 42 investors poured $14.1 million into Captial Management from September 2000 to January 2005, when the company closed.<\/p>\n
Paperny and Gilabert met in 1998 while working at the same brokerage firm.<\/p>\n
<\/p>\n
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net]<\/p>\n
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net<\/a> is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! West Palm Beach (HedgeCo.Net) – Two men involved in a hedge fund scam that defrauded investors out of $6 million were sentenced yesterday in Los Angeles. Keith Gilabert, 33, of Valencia, CA, will serve the maximum five year prison sentence […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-7198","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/7198","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=7198"}],"version-history":[{"count":0,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/7198\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=7198"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=7198"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=7198"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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