Second Member Of Altamont Global Partners Pleads Guilty To $16 Million Investment Fraud
November 6, 2013
Orlando, Florida – Acting United States Attorney A. Lee Bentley, III announces that Philip Leon (68, Altamonte Springs) today pleaded guilty to conspiracy to commit mail fraud and wire fraud. He faces a maximum penalty of 20 years in federal prison. Leon has also agreed to forfeit over $4 million in artwork and monies that are being held in various bank and trading accounts. These proceeds will be returned to the victims as partial payment towards the expected restitution in the case of over $16 million. Sentencing has been set for January 23, 2014.
According to court documents, Altamont Global Partners, L.L.C owned or managed a series of investment funds. Leon registered Altamont Global with the Florida Secretary of State in March 2009 and was a managing member of the company.
The Matterhorn Fund, LLC was the first fund for which investors were solicited by Altamont Global. Leon served as the Fund Manager for the Matterhorn Fund. To induce individuals to invest, Leon and others falsely represented that the Matterhorn Fund had a long history of making profits, that Leon was a graduate of Stanford University, that he worked for Salomon Brothers as an institutional investment advisor, and that he had successfully traded worldwide investment vehicles for over three decades. None of those representations were true.
In the first quarter of 2010, the Matterhorn Fund experienced significant trading losses. Rather than accurately reflect those losses on the quarterly statements, Leon falsified the quarterly statements and the claim that the Matterhorn Fund was earning an above-market rate of return.
The false rates of returns that were claimed for the Matterhorn Fund were then used to induce individuals to invest in the McKinley Fund. The McKinley Fund also lost money, and Leon again falsified quarterly statements for that fund. Leon and others then used their alleged performance with the Matterhorn Fund and the McKinley Fund to solicit investments in two other funds: Midas Management Partners LLC and Binary Strategy One Fund, LLC. In total, over 200 individuals invested more than $16 million in the four funds owned or managed by Altamont Global.
In June 2012, the National Futures Association (NFA) conducted a surprise examination of Altamont Global. During that examination, the NFA discovered that the quarterly statements were being falsified to hide losses and that the net asset values of the Matterhorn Fund and the McKinley Fund were being inflated, to make it appear that trading had been successful. On July 16, 2012, the U.S. Commodity Futures Trading Commission filed a complaint against Leon and others. That same day, the District Court entered an emergency order freezing the assets of the defendants in that civil case.
Leon is the second individual to be charged and plead guilty in this case. On August 22, 2013, one of Leon’s partners (John G. Wilkins, 63, of Chuluota, Florida) pleaded guilty to conspiracy to commit mail fraud and wire fraud. Wilkins’ sentencing is set for November 21, 2013.
These cases were investigated by the United States Secret Service and the State of Florida, Office of Financial Regulation. They are being prosecuted by Assistant United States Attorney Roger B. Handberg.