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Fraud Spotlight: Another Day, Another Hedge Fund Fraud in NJ


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Originally posted in the August 2012 edition of Corgentum Consulting's Operational Due Diligence Insights.

Published in: Business, Economy & Finance
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Fraud Spotlight: Another Day, Another Hedge Fund Fraud in NJ

  1. 1. Fraud Spotlight: Another Day, Another Hedge FundFraud in NJAccording to authorities, another classic Ponzi scheme has hit the state of NJ.Daniel Dragon of Lebanon, NJ and Carmelo Provenzano of Garfield, NJ have pleaded guilty to wirefraud in a Camden, NJ courtroom. This guilty plea comes on the heels of accusations of fraud againsta Jersey City, New Jersey based fund and Osiris Partners.In this case, Dragon and Provenzano told investors that:  The firm had created a proprietary black box computer algorithm that had produced returns of 170% from 2009 to July 2011 in the FX markets.  Investors could get their money back at any time with only one day’s notice.When some investors started asking questions the duo emailed investors screenshot of fictitiousinvestor account statement from a completely made up investor named Mel Tannenbaum.The entire operation was a fraud and investors lost more than $3.5 million. Dragon and Provenzanoused the money they stole to furnish an extravagant lifestyle, which included giving a $4,000 tip onan $18,241 bar bill in a Los Angeles nightclub. The two men face up to 20 years in prison and$250,000 in fines.A third co-conspirator named George Sepero is currently awaiting trial.Originally posted in the August 2012 edition of Corgentum Consultings Operational Due DiligenceInsights.For More info@corgentum.comInformation | Blog | Twitter Feed Tel. 201-360-2430About Corgentum Consulting:Corgentum Consulting is a specialist consulting firm which performs operational due diligencereviews of fund managers.The firm works with investors including fund of funds, pensions, endowments, banks ultra-high net-worth individuals, and family offices to conduct the industrys most comprehensive operational duediligence reviews. Corgentums work covers all fund strategies globally including hedge funds, privateequity, real estate funds, and traditional funds. The firms sole focus on operational due diligence,veteran experience, innovative original research and fundamental bottom up approach to duediligence allows Corgentum to ensure that the firms clients avoid unnecessary operational risks.©2012 Corgentum Consulting, LLC