MANHATTAN (CN) - Using a pseudonym and a deceptively named shell company, a partner for a Blackstone affiliate snookered investment firms out of more than $95 million, federal prosecutors said Monday.
Andrew Caspersen, 39, developed the scheme in late 2015 just two years after joining the Blackstone affiliate Park Hill Group, according to the criminal complaint, unsealed today but dated Friday.
One scheme involved Caspersen offering promissory notes with a 15 percent annual interest rate, issued by his shell company, Irving Place III SPV, according to the complaint.
Regulators say Caspersen "deceptively named" his business Irving Place III SPV since there is a legitimate private equity fund called Irving Place Capital Partners III SPV.
"Unlike Irving Place Capital Partners III SPV, Irving Place III SPV had no legitimate business," the complaint states. "Rather, Irving Place III SPV is only a vehicle to solicit money from investors, and its only asset is a bank account controlled by Caspersen."
Irving Place Capital Partners III SPV is not associated with Caspersen.
The government says Caspersen drafted a promissory note and a security agreement to facilitate the offering, and used the fictitious name John Nelson to sign these documents on behalf of Irving Place III SPV.
After getting his first $25 million investment, Casperson "simply took control of these funds for his personal use," regulators say.
U.S. Attorney Preet Bharara's statement focused on what he described as an elaborate ruse.
"To advance his $95 million fraud scheme, Caspersen allegedly put on a shameful charade - creating fake email addresses, setting up misleading domain names, and inventing fictional financiers," he wrote. "When confronted by a suspicious client who had invested $25 million, Caspersen had no good answers."
A resident of New York City and of the ritzy Westchester suburb Bronxville, Caspersen faces up to 40 years in prison if convicted of both counts of securities fraud and wire fraud. The SEC complaint notes that Caspersen graduated from Harvard Law School in 2002 and Princeton University in 1999.
Prosecutors seek a $5 million fine, or twice the gross gain or loss of the offense.
The commission's complaint seeks disgorgement of all ill-gotten gains, unspecified monetary penalties and an injunction preventing Casperson and Irving Place III SPV from committing future violations.
Caspersen's attorney did not immediately respond to an email request for comment.
A subsidiary of Blackstone, one of the world's largest alternative investment vehicles, Park Hill has offices in New York and two other U.S. cities, as well as London, Hong Kong and Sydney.
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