International Law

Hedge Funds Investors Defrauded Out of $20 Million

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From the FBI Atlanta Press Release:

MANYU OGALE, 44, of Jacksonville, Florida, was arraigned today before United States Magistrate Judge Russell G. Vineyard on charges of wire fraud related to a "Ponzi" investment scheme.

United States Attorney David E. Nahmias said of the case, "This defendant is charged with using a Ponzi scheme to steal millions of dollars from investors who believed they were making wise investment choices. We continue to advise members of the public to use caution when investing their hard-earned money, even with someone they know, especially when the promised rates of return sound too good to be true."

According to Nahmias and the documents and information presented in court: 

OGALE was indicted by a federal grand jury on August 12, 2008. The indictment charges that from January 2003 through May 2007, OGALE owned and operated "Den Haag Capital, LLC," which he represented to be "a private hedge fund" for "sophisticated investors."

OGALE falsely represented to investors that he had created an algorithm that allowed him to determine whether various foreign currencies were undervalued or overvalued, and he promised to invest his clients' money in the foreign currency markets using the algorithm that he had created. OGALE guaranteed investors an annual rate of return of 50%.

In less than 5 years, OGALE took in over $20 million from investors. OGALE sent monthly statements to investors, falsely claiming that their investments had substantially increased in value, and OGALE used some of the money that he received from later investors to pay substantial returns to some of the early investors-the classic"Ponzi" fraud scheme. OGALE never invested any of the money, however, and, instead, used much of it to pay his own personal expenses in an effort to create an aura of legitimacy for himself.

Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government's burden to prove the defendant's guilt beyond a reasonable doubt at trial.

Full post as published by Misleading Advertising Law on August 26, 2008 (boomark / email).