LOS ANGELES - Keith Gilabert, who ran a hedge fund called GLT Venture Fund, was sentenced Monday to 5 years in federal prison for defrauding investors of $6 million. Gilabert, 33, of Valencia, who also ran the Capital Management Group, also was ordered to pay $1 million in restitution. Justin Paperny, 32, of Studio City, was sentenced to 18 months in prison and ordered to pay $510,000 in restitution.
Gilabert pleaded guilty to conspiracy in 2006. He lied to investors and took more than $6 million from 40 suckers, ostensibly for his bogus hedge fund, which he claimed was earning 27 percent annual returns. Actually, prosecutors said, he lost and took for himself most of the investors' money, from 2002 through 2005.