Hedge Fund Fraudster Faces US Jail Term

by Amanda Banks, for LawandTax-News.com, London

12 August 2005

A New Zealand man accused of scamming 30 hedge fund investors out of more than $16 million has pleaded guilty to three counts of fraud in a United States federal court.

Turner lured investors by purporting to run a hedge fund that invested in securities in US markets. Turner told the investors, mainly from Australia and New Zealand, that his Bahamas-based fund, Turning International Ltd., had made a profit of 37% and controlled $300 million. However, court documents revealed that the fund only controlled only $1.5 million, did not invest in securities, and had never made a profit.

In accordance with a plea bargain agreement, Turner must forfeit five properties held in the Bahamas valued at between $12 million and $13 million. He must also pay more than $16 million in restitution.

Turner was apprehended following a 17-month undercover operation by the Federal Bureau of Investigation, which was assisted by ex-fund fraudster-turned preacher Barry Minkow, who was ordered to pay $26 million in restitution to victims of his ZZZBest fund in the 1980s.

Turner, who is currently being held in the Nassau County Correctional Centre in East Meadow, New York, initially faced a prison term of up to twenty years, but is likely to be jailed for between 6 and 7 years as a result of his plea agreement.

After serving his prison term he will be deported to New Zealand.

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