| NEW YORK
NEW YORK May 25 A San Francisco investment fund
manager pleaded guilty on Thursday to conspiring to defraud
investors by fabricating an impressive investing track record,
New York federal prosecutors announced.
Nicholas Mitsakos, who ran a fund called Matrix Capital
Markets, pleaded guilty to one count of conspiracy to commit
securities fraud and wire fraud in Manhattan federal court,
The charge carries a maximum sentence of five years, though
prosecutors expect to seek a lesser sentence of 30 to 37 months,
according to a written plea agreement. As part of the agreement,
Mitsakos agreed not to appeal a sentence of 37 months or
shorter, and to forfeit about $861,000.
A lawyer for Mitsakos could not immediately be reached for
Mitsakos, 57, was arrested and charged in August 2016.
Prosecutors said he tried to lure investors to Matrix by
telling them he oversaw more than $60 million of assets and
posted annual returns ranging from 20 percent to 66 percent
between 2012 and 2015.
In fact, prosecutors said, Mitsakos managed no customer
assets at all before receiving an investment of about $2 million
from a Cayman Islands fund in September 2015. He then spent
about $800,000 on personal expenses, and lost a significant
amount of the $1.2 million he did invest, according to
"As he admitted in pleading guilty today, Nicholas Mitsakos
purported to operate a successful hedge fund, but in reality, it
was a sham from the outset," Acting U.S. Attorney Joon Kim in
Manhattan said in a statement.
The case is USA v. Mitsakos, U.S. District Court, Southern
District of New York, No. 16-cr-00631.
(Reporting By Brendan Pierson in New York; Editing by Tom