MANHATTAN (CN) – A Brooklyn cab driver and two cohorts passed themselves off as hedge fund managers in a $20 million swindle, according to federal prosecutors.
Alan Fishman, 49, and Daniel Ledven, 37, are charged with securities fraud and wire fraud in a scheme dating back to 2003. Fishman’s nephew, Gary Gelman, 39, is still on the run, officials say.
Prosecutors say that although AR Capital Group raised almost $15 million from investors, the defendants sold the company for $150,000 in 2006 when the Securities and Exchange Commission was preparing to audit them.
Fishman, self-described president of ARC, and his pals allegedly told clients they were investing in international real estate ventures and leveraged trading. They allegedly got an accountant to provide bogus monthly statements that showed large returns. And they invested in only one Ukrainian company, which was not involved in real estate, according to the complaint.
After selling the company before the impending audit – shorting their customers $15 million – the men raised another $5 million bringing their haul to $20 million, prosecutors say.
An FBI special agent said one of the people they conned was a 65-year-old retired Ohio man, who invested $10,000 after a cold call, then another $250,000, and finally put $8 million into the fund.
Each defendant faces up to 20 years in prison and a $5 million fine if convicted.