On Monday, US prosecutors stated that they have arrested a former partner at a unit of boutique investment bank, PJT Partners Inc., on charges that he fraudulently obtained $70 million and stole $25 million from investors.
The Wall Street Journal reported that Andrew W. Caspersen, with degrees from Harvard and Princeton, concocted a fake investment fund, set up a bogus Internet domain names with fake email addresses and invented a fictitious financier to steal $25 million. Federal prosecutors charged the private-equity executive with wire fraud and securities fraud.
Caspersen, 39, became a partner at the private-equity-fund advisory business after it parted ways from Blackstone in 2015 where he advised investors who purchased and sold stakes in private-equity firms. He was also the managing principal at buyout giant Blackstone Group LP's Park Hill Group.
According to Reuters, Caspersen sought $24.6 million from a charitable foundation associated with a hedge fund in New York along with $400,000 from one of the fund's employees. He said he would invest it in a secured loan to a private fund. However, Caspersen used the money for personal options trading, losing $14.5 million in the process. In a 14-page complaint disclosed on Monday, other funds went to cover up unauthorized wire transfers at his company.
PJT's shares closed down 10.62 percent after dropping as much as 24.3 percent to a record low earlier in the day on news of the charges, reports News Max. The company said in a statement that it was "stunned and outraged" by the actions of Caspersen. Caspersen was then apprehended on Saturday and released on a $5 million bond following a court hearing that will be held on Monday, where federal prosecutors argued that his wealth should require bail to be set even higher which is at least $20 million.
In 2009, the elder Caspersen committed suicide amid an investigation conducted by the IRS. Assistant US Attorney Cristine Magdo said his net worth once was $1 billion.
Caspersen was ordered by the US Magistrate Judge James Francis to seek mental health treatment in light of what his lawyer, Daniel Levy, referred vaguely to as recent "thoughts". According to his lawyer, Caspersen is also "a daily alcohol user".
