Georgia Hedge Fund Manager Charged With Cheating Investors Out Of $180m

by Leroy Baker, for LawAndTax-News.com, New York

31 March 2006

A Georgia-based hedge fund manager is facing criminal charges after prosecutors accused him of defrauding investors in the hedge fund that he ran to the tune of $180 million.

Kirk Sean Wright, 35, of Marietta, Georgia, has been charged in a federal criminal complaint with mail fraud, relating to the collapse of investment funds operated by Wright's companies, International Management Associates (IMA) and International Management Associates Advisory Group (IMAAG).

Wright has since gone missing and is now wanted by the Federal Bureau of Investigation.

"The complaint alleges a serious investment fraud impacting numerous investors and involving as much as $150 million to $180 million in missing investor assets," announced United States Attorney David Nahmias.

"Mr. Wright is aware that he is a fugitive and he is going to be arrested. The best and safest course for all parties at this point would be for Mr. Wright to turn himself in to the FBI immediately," he added.

According to the charges, in late 2005, Wright allegedly represented to several clients that IMA and IMAAG had over $150 million under management, in the custody of the brokerage firm Ameritrade, Inc - a claim repeated to Securities and Exchange Commission (SEC) officers in 2006.

In its most recent filings with the SEC, in 2006, IMA and IMAAG also purported to have over $180 million in client funds under management and throughout 2005, IMA and IMAAG sent quarterly statements to its investors purporting to show that they were receiving positive investment returns, and in some cases had millions of dollars in their accounts. However, by September 2005, some investors began to express concerns about the integrity of their funds.

The complaint goes on to allege that Wright lied to investors and the SEC, and fabricated Ameritrade statements in an attempt to prove the existence of accounts. In reality, it is alleged that Ameritrade had only two accounts associated with IMA and IMAAG from at least August 2005 through March 2006, which, in total, contained less than $150,000.

The case is being investigated by special agents of the FBI as well as the Internal Revenue Service.

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