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€30 million fraud scheme traced to former Malta consul's firm
Hedge fund managers jailed in Atlanta over US$30 million fraud scheme siphoned off to Malta companies – US district court prosecutor.
5 March 2012, 12:00am
Thomas Repke, 58 of Salt Lake City, Utah and James Jeffrey, 59 of Belleville, Ontario were sentenced on Friday by US District Judge Orinda D. Evans on charges of conspiracy to commit wire and mail fraud.
According to the court documents seen by MaltaToday, Coadum Advisors and Mansell Capital transferred the majority of funds to foreign bank accounts controlled by Maltese firms owned by the former consul to Mauritius, Keith Robert Sampson Bristol.
Attempts to contact Sampson Bristol at his Valletta offices proved futile.
Sampson Bristol is the shareholder of various companies under the ownership of the Exodus Group, which are believed to have been the recipients of the €30 million in funds allegedly held in escrow.
Repke and Jeffrey were principals of the Utah-based Coadum Capital Advisors, a hedge fund that drew hundreds of investors across the US into a series of investment funds between 2005 and 2008.
The two pleaded guilty to defrauding their investors by lying to them about how their money was invested, what returns were being earned, and what balances they held.
US Attorney Sally Quillian Yates said that Repke and Jeffrey defrauded over 200 victims around the country out of tens of millions of dollars, most of which has been dissipated in overseas accounts. "They targeted seniors, retirees, and others simply looking for safe and secure returns, but now these corrupt managers will be in federal prison for years to come," Quillian Yates said.
Repke was sentenced to 10 years in prison to be followed by five years of supervised release, while Jeffrey was sentenced to seven years and three months in prison to be followed by five years of supervised release.
Both defendants were ordered, jointly, to pay $29,740,180 in restitution to over 200 victims.
According to the prosecution, Repke and Jeffrey had attracted nearly 250 investors and nearly US$40 million in investments.
Coadum offered shares in hedge funds and advertised monthly returns often exceeding 5%. Part of the sales pitch that Coadum made to investors was that their funds would remain protected in an escrow account and would therefore not be at risk.
Unknown to investors, Repke and Jeffrey transferred some US$30 million overseas to accounts in Malta and in Switzerland.
This money was supposedly invested in a series of hedge funds or other investments operated by a "supposed Malta-based trader".
The investments produced no earnings at all, and by the end of 2007 only a fraction of the transferred funds remained deposited in these accounts.
The case was described as a 'showcase enforcement' by the prosecution, who said that the action is part of President Barack Obama's Financial Fraud Enforcement Task Force.
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