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San Francisco fund manager pleads guilty to fraud conspiracy
May 25, 2017 / 10:49 PM / 3 months ago

San Francisco fund manager pleads guilty to fraud conspiracy

NEW YORK, May 25 (Reuters) - 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, prosecutors said.

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 comment.

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 prosecutors.

"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 Brown)

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