(FOX 2) – A Detroit wealth fund manager duped investors for tens of millions of dollars before his scheme was exposed, leading to federal wire fraud charges.
He was sentenced to 100 months in prison after pleading guilty.
Big picture view:
The chief executive of an equity fund will spend years in prison for stealing $39 million from his investors, according to a news release from U.S. attorneys from the District of Eastern Michigan.
Andrew Middlebrooks of Detroit was sentenced to 100 months in federal prison after pleading guilty to wire fraud.
Federal prosecutors say he devised a scheme that netted him millions of dollars from people under false pretenses and promises.
The 33-year-old had solicited clients by telling them he could “exploit inefficiencies” in the global equity market, promising them major returns to investors.
Dig deeper:
Instead, EIA All Weather Alpha Fund 1 Partners failed to produce any predicted returns, instead ending with massive financial losses for investors.
To avoid communicating the losses, Middlebrooks, who served as the majority owner, CEO, and portfolio manager, went looking for new investors and giving more false statements about the fund’s performance.
He also created false documents that claimed the fund had made money, including one file that claimed a 476% return on investment.
“Eventually, Middlebrooks’ scheme collapsed, resulting in losses to 97 investors exceeding $34 million,” a news release from the U.S. Attorneys office said.
What they’re saying:
“This financial charlatan used sophisticated methods and a complex web of deception to trick unsuspecting victims into trusting him with their money. Con artists like this will be prosecuted to the full extent of the law,” said United States Attorney Jerome F. Gorgon Jr.
The Source: Details from a press release were cited while reporting this story.
