Attorneys Drew Skinner, Negar Tekeei, and Alex Rossmiller are in charge of the prosecution. Hus lies caused millions of dollars of losses. Advisory Firm Gets 12 Years For $120M Ponzi Scheme. U.S. Attorney Damian Williams said: David Hu shirked his fiduciary responsibilities and defrauded IIG funds and investors for more than a decade. (212) 637-2600, Human Trafficking & Child Sexual Exploitation, Department of Justice Harassment Prevention Resource, Download Martin Silver superseding information. Mismarking the value of multiple loans that had, in reality, defaulted (the Defaulted Loans). Then, HU caused the CLO Trust to enter into fake loan transactions with the Panamanian Shell Entities. These Distressed Loans included, for example, loans for which the borrowers had missed multiple scheduled payments. In addition to the prison sentence, HU, 64, of West Orange, New Jersey, was ordered to serve three years of supervised release. Your exam is being submitted. HU then directed that the proceeds from the fraudulently induced New Loan be transferred into Borrower-1s account, effectively reimbursing the account for the earlier $6 million transfer to the Retail Fund. According to the allegations contained in the Information and based on statements made in Manhattan federal court: SILVER and a co-conspirator (CC-1) founded IIG in 1994. From approximately 2007 to 2019, SILVER conspired to defraud investors in IIG-managed funds by: (i) overvaluing distressed loans held by the IIG Funds, (ii) falsifying paperwork to create a series of fake loans that were classified, fraudulently, as positively performing loans, and to otherwise hide losses, (iii) selling overvalued and fake loans to a collateralized loan obligation trust and new private funds established and advised by IIG, and (iv) using the proceeds from those fraudulent sales to generate liquidity required to pay off earlier investors in a Ponzi-like manner. <>stream (212) 637-2600, Human Trafficking & Child Sexual Exploitation, Department of Justice Harassment Prevention Resource. IIGs purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on soft commodities, such as coffee, agriculture, fishing, and other food products. In March 2018, IIG reported to the SEC that it had approximately $373 million in assets under management. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Listen to free podcasts to get the info you need to solve business challenges! Skywatchers: Mays Full Flower Supermoon will be followed by a lunar South Carolina, Texas See New Mass Shootings. Mismarking multiple loans that were distressed (the Distressed Loans). IIG, it said, touted its risk control strategies and its robust credit review process for borrower. Todays sentence sends the message that brazen fraud does not pay and will be appropriately punished.. Investments in TOF, STFF, and GTFF were marketed by IIG to institutional investors, such as pension funds, hedge funds, and insurers. David Hu shirked his fiduciary responsibilities and defrauded IIG funds and investors for more than a decade, Williams said in a news release. They conspired to defraud IIG investors from approximately 2017 to 2019. This Office was one of the districts affected by the SolarWinds intrusion. May 3, 2016 3:38pm. Sentencing before Judge Hellerstein has been scheduled for November 16, 2021, at 11:00 a.m. Audrey Strauss, United States Attorney for the Southern District of New York, announced that MARTIN SILVER, a managing partner and the chief operating officer of the New York-based investment advisory firm International Investment Group (IIG), pled guilty today before U.S. District Judge Alvin K. Hellerstein to investment adviser fraud, securities fraud, and wire fraud offenses in connection with an over $100 million scheme to defraud IIGs investment advisory fund clients and investors. IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (TOF), (2) the IIG Global Trade Finance Fund, Ltd. (GTFF), and (3) the IIG Structured Trade Finance Fund, Ltd. (STFF). David Hu, the former managing partner of International Investment Group (IIG) was sentenced to 12 years in prison for his role in defrauding investors of more than $120 million in a Ponzi-like scheme. To replace the funds from Borrower-1s account that were used to make it appear as though the Argentine Borrower had repaid its debt to the Retail Fund, HU fraudulently induced the Retail Fund to invest in a new, fake $6 million loan to the Argentine Borrower (the New Loan). On March 23, 2023, the U.S. District Court for the Southern District of New York entered a final consent judgment against Martin Silver, the co-founder of International Investment Group (IIG), a formerly registered investment adviser, enjoining him from violating the antifraud provisions of the federal securities laws. Convicted at his second trial, Silver was sentenced in 2018 to six and a half years in prison. He began serving his sentence in 2020, despite pleas from his lawyers about his health problems and the COVID-19 pandemic. Land The Job You Want Using the 'Rule of 5', Are You Best Suited to Big Law . USA Herald covers everything from breaking news to investigative journalism. In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry. 1700-05, 1932-43; GX 1522. Creating fictitious loans in order to hide the losses resulting from the Defaulted Loans, including from auditors reviewing TOFs financials, by removing the Defaulted Loans from the TOF portfolio and replacing them with tens of millions of dollars in fictitious loans to purported borrowers in foreign countries (the Fake Loans). In or about March 2017, HU caused approximately $6 million to be transferred into an account associated with the Argentine Borrower from the account of a different borrower (Borrower-1), and further directed the funds from Borrower-1s account to pay off the debt owed by the Argentine Borrower to the Retail Fund. This case is being handled by the Offices Securities and Commodities Fraud Task Force. Mr. Williams praised the In this March 12, 2019 file photo, Martin Fox arrives at federal court in Boston to face charges in a national college admissions bribery scandal. a};@_5,}V$dYOKl'[>r. His sentencing is pending, Williams said. IIGs principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated. Dont forget you can visit MyAlerts to manage your alerts at any time. IIGs principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated. Stephen Yang. Silver reaped about $4 million from a pair of illicit schemes that saw him convicted in two Manhattan Federal Court trials that ultimately got him a seven-year prison sentence. Here are some points for and against, LegalTech: Legal Documentation Automation, Clifford Chance Elect 32 New Partners and Move Closer To Female Equity. IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Judgment by personal service or otherwise: (a) Defendant's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). Private Foundations VS Donor-Advised Funds, Valuation, Fundamentals, Momentum: The Case for Mid-Cap Value Stocks. According to the Information and based on statements made and documents filed in federal court in this case: HU and co-conspirator MARTIN SILVER founded IIG in 1994. The military court eventually convicted Martin on one count of mishandling classified information and one count of assault on a child. One St. Andrews Plaza - New York, NY 10007, Nicholas Biase The scheme HU participated in involved, among other things: * * *. IIG purported to value the trade finance loans in the IIG Funds on a regular basis. To further conceal the fraudulent nature of the New Loan, HU caused the creation of forged documents to make it appear as though the New Loan was a legitimate loan to the Argentine Borrower. SILVER pled guilty to investment adviser fraud, securities fraud, and wire fraud offenses in April 2021 and his sentencing is pending. The sentencing judge, as the eyes and ears of the Rule of Law, is in the best position to fashion a fit and appropriate sentence. MARTIN SILVER, 63, of New Jersey, pled guilty to one count of conspiracy to commit investment adviser fraud, securities fraud, and wire fraud, which carries a New Zealand Law Salary Levels - Who Earns Most? IIG purported to value the trade finance loans in the IIG Funds on a regular basis. In addition to the prison sentence, Hu, 64, of West Orange, New Jersey, was ordered to serve three years of supervised release, according to Williams. They overvalued portfolio assets and replaced non-performing assets with fictitious loans that were reported as if they were legitimate performing assets, among other deceptions. We and our partners use data for Personalised ads and content, ad and content measurement, audience insights and product development. Making sure that victims of federal crimes are treated with compassion, fairness and respect. This Office was one of the districts affected by the SolarWinds intrusion. IIG advertised itself as specializing in global trade financing, particularly in providing trade finance loans to small and medium-sized businesses. In addition to the prison sentence, Hu was ordered to serve three years of supervised release. This Legal Leader Thinks So, 10 Steps for Lawyers to Streamline their BD Process, Best Trusts and Estates Law Firms: Top Picks for Your Legal Needs. The court also announced it planned to impose restitution to victims and forfeiture of the proceeds of the offenses involved in the case, with the amounts to be determined at a later date. Using the CLO Trust and Panamanian shell entities to cover up losses. Its purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on soft commodities, such as coffee, agriculture, fishing. It also claimed that its finance loans were secured by collateral, such as the underlying traded goods, assets held by the borrowers, or expected payments by third parties.. Specifically, in or about December 2012, IIG became an investment adviser to an open-ended mutual fund marketed to retail investors (the Retail Fund). The U.S. Department of Justice (DoJ) announced that Martin Silver, former managing partner and chief operating officer at New Yorks International Investment Silver pleaded guilty to investment adviser fraud, securities fraud, and wire fraud offenses in April 2021 and is awaiting sentencing. According to authorities, all three funds were marketed to institutional investors, including pension funds, hedge funds and insurers. The Court also announced that it would impose restitution to victims and forfeiture of the proceeds of the offenses, with the amounts to be determined at a later date. Or Small? This case is being handled by the Offices Securities and Commodities Fraud Task Force. Mr. Silver cut a diminished figure in court, staggering in a few minutes before his sentencing wearing a dark, loosely fitted suit, a blue surgical mask and a pair of clear, disposable vinyl gloves. P 54(b), there is no just reason for delay in the entry of Judgment. Click here for information on the investigation into the Mount Vernon Police Department. x|y@W=$ !!_ K %B(.,EPA@Vu T5ZRJiSS7J_}33_8{ Nq-3Vc]y;!T=aQGf/!A'4,\>)Qo%D|~~? dd1z>"IE'*(.y+gcEoqH/,o]_FaMlX;\ Some of our partners may process your data as a part of their legitimate business interest without asking for consent. . A Florida man is facing life in prison after a jury took less than 15 minutes to find him guilty of murder and arson following a three-day trial. In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry. Hu mismarked millions of dollars of loan assets, falsified paperwork to create fake loans, sold overvalued and fake loans, used the proceeds from those sales to pay off earlier investors, and falsified paperwork to deceive auditors and avoid scrutiny. You are now logged in. The SEC also fileda complaint in the same court against Hu in 2020 over the scheme. Click here to report information on Amazon warehouses. Victoria Bosah Legal marketing tips for 2023 . Smiley Martin has a criminal history dating back to 2013, including his most recent sentencing in 2018 to 10 years in prison for domestic violence and assault with great bodily injury. Mismarking multiple loans that were distressed (the Distressed Loans). According to the allegations contained in the Information and based on statements made in Manhattan federal court: SILVER and a co-conspirator (CC-1) founded IIG in 1994. Securities and Exchange Commission v. Silver. HU pled guilty in January 2021 to investment adviser fraud, securities fraud, and wire fraud offenses. CONSENT OF DEFENDANT MARTIN SILVER 1. SILVER pled guilty to investment adviser fraud, securities fraud, and wire fraud offenses in April 2021 and his sentencing is pending. According to the information filed against Hu by the Justice Department in 2020, as well as statements made and documents filed inU.S. District Court for the Southern District of New York, Hu and co-conspirator Martin Silver, who founded IIG together in 1994, provided investment management and advisory services through the firm, including for three private funds that it operated: IIG Trade Opportunities Fund, IIG Global Trade Finance Fund, and IIG Structured Trade Finance Fund. WebMartin Silver *6170 Citibank may transmit payment electronically to the Commission, which will provide detailed ACH transfer/Fedwire instructions upon request. 360 (S.D.N.Y.) The managing partner andchief investment officerof a former New York RIA firm who was arrested in 2020 has been sentenced to 12 years in prison for his role in a Ponzi-like scheme that defrauded his firms clients out of more than $120 million, according to Damian Williams, U.S. Attorney for the Southern District of New York. HU caused the creation of fake promissory notes and other paperwork to conceal the fraudulent nature of the loans to the Panamanian Shell Entities. We and our partners use cookies to Store and/or access information on a device. In March 2018, IIG reported to the SEC that it had approximately $373 million in assets under management. Investments in TOF, STFF, and GTFF were marketed by IIG to institutional investors, such as pension funds, hedge funds, and insurers. IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (TOF), (2) the IIG Global Trade Finance Fund, Ltd. (GTFF), and (3) the IIG Structured Trade Finance Fund, Ltd. (STFF). Are You Sure You Want to Refer Out All That 401(k) Business? Martin Silver had co-founded investment advisory firm in 1994, Co-conspirator David Hu was sentenced to 12-year term in July. MARTIN SILVER, 63, of New Jersey, pled guilty to one count of conspiracy to commit investment adviser fraud, securities fraud, and wire fraud, which carries a IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant is permanently restrained and enjoined from violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (the Advisers Act) [15 U.S.C. He has not yet been sentenced. Using a collateralized loan obligation trust (the CLO Trust) to create liquidity through investments in fraudulent loans. According to the SEC's complaint, from October2013 to at least July 2018, Silver, defrauded IIG's investment advisory clients by, among other things, grossly overvaluing the assets in IIG's flagship hedge fund. IIG also advised the Venezuela Recovery Fund (VRF), a fund that managed the remaining assets of a failed Venezuelan bank (VRF, together with TOF, GTFF, and STFF, the IIG Funds). In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry. WebView the profiles of people named Martin Silver. First Name Email Address: His sentence will be formally enforced following the conclusion of the forfeiture and restitution proceeding in the case. A foreign institutional investor provided $70 million as the seed investment for GTFF, and, later, $130 million as the seed investment for STFF. Log in to keep reading or access research tools. IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (TOF); (2) the IIG Global Trade Finance Fund, Ltd. (GTFF); and (3) the IIG Structured Trade Finance Fund, Ltd. (STFF). JUDGMENT AS TO DEFENDANT MARTIN SILVER: The Securities and Exchange Commission having filed a Complaint and Defendant Martin Silver ("Defendant") having entered a general appearance; consented to the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry of this Judgment; waived findings of fact and conclusions of law; and waived any right to appeal from this Judgment: IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that, as provided in Federal Rule of Civil Procedure 65(d)(2), the foregoing paragraph also binds the following who receive actual notice of this Judgment by personal service or otherwise: (a) Defendant's officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Defendant or with anyone described in (a). Silver personally signed off on rent regulation and 421-a tax abatement legislation. Finally, under the guise of the fake loan transactions with the Panamanian Shell Entities, the CLO Trust disbursed funds that HU diverted to TOF in order to pay off TOFs various debts and obligations. Assistant U.S. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia. In [], Manchester City 'hire 5,000-an-hour lawyer to fight Premier League charges', COLCHESTER, Conn., June 11, 2004 -LAWFUEL Scott + Scott, LLC, a Co, One of the longest running cases to affect the LMX reinsurance spira, 3 October LAWFUEL The Law News Network Ex-NFL star TIMMY SMITH, , June 17, 2004 LAWFUEL Skadden was ranked as the top corporat, Law firms take different approaches to in-office policies about in-office work, 4 Principals That Can Help Lawyers With The 4 Day Work Week. Updated. This case is being handled by the Offices Securities and Commodities Fraud Task Force. She strictly adheres to the ethical standards in journalism. IIGs purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on soft commodities, such as coffee, agriculture, fishing, and other food products. IIGs trade finance loans were purportedly secured by collateral, such as the underlying traded goods, assets held by the borrowers, or expected payments by third parties. Asher Martin courtesy of State Attorneys Office. A foreign institutional investor provided $70 million as the seed investment for GTFF, and, later, $130 million as the seed investment for STFF. (AKH). IIG and, in turn, HU, received a performance fee with respect to the IIG Funds, as well as a management fee, which was calculated as a percentage of the assets under management held in the Funds. His accomplice, Malvo, was sentenced to life imprisonment without the possibility of parole. In this way, sentencing is a true partnership between the principles, which guide the judge, and the judges own sense of justice as see through the factual, legal and societal lens. Then, HU caused the CLO Trust to enter into fake loan transactions with the Panamanian Shell Entities. . As an investment adviser to the Retail Fund, IIG made investment recommendations, including recommendations that the Retail Fund invest in trade finance loans originated by IIG. Silver begged for mercy ahead of his sentencing in a letter to the judge, saying he was "broken-hearted" he had caused people to lose faith in government. Hus lies caused millions of dollars of losses, he added. In addition, the proceeds from those fraudulent sales were used to generate liquidity required to pay off earlier investors in a Ponzi-like way, the Justice Department charged. My Office remains committed to policing investment advisers who seek to take advantage of their clients for personal and professional gain.. . IIG and, in turn, Hu, received a performance fee with respect to the IIG Funds, as well as a management fee, which was calculated as a percentage of the assets under management held in the Funds, the court said. Subscribe to Justia's Free Newsletters featuring summaries of federal and state court opinions. Austin Belcak runs a million-strong network called 'Cultivated Culture' and provides advice on landing the job you really want (as distinct from the one you have presently). LawFuel is a law news and jobs network founded in 2001. SILVER was a managing partner and the chief operating officer of IIG. Inducing a retail mutual fund to invest in a fictitious $6 million loan. As an investment adviser to the Retail Fund, IIG made investment recommendations, including recommendations that the Retail Fund invest in trade finance loans originated by IIG. IIGs principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated. Hu mismarked millions of dollars of loan assets, falsified paperwork to create fake loans, sold overvalued and fake loans, used the proceeds from those sales to pay off earlier investors, and falsified paperwork to deceive auditors and avoid scrutiny. Mr. Williams praised The Feb. 1 judgment resolved all the issues in this action, except the Commissions claims for monetary relief against Hu, the documents said. VOGr.n+>;UqbhD%bZ+3 &)oRMLxY*^7'=6,B-!Eg$X[FYr,-uM,OXYNZ^ly'[s.xkuuuuz]A}>wr CsO,;3Q+Fy~t|\:_rn[gt|z #X60m $$ $Xo~No]*gF>U]mzmW?
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