President Of Investment Fund Sentenced In Manhattan Federal Court To 30 Months In Prison For $2 Million Ponzi Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ANAND SEKARAN, the President and Director of Wasson Capital Ltd. (“Wasson”), an investment fund, was sentenced today in Manhattan federal court to 30 months for engaging in a $2.3 million scheme to defraud Wasson’s investors. SEKARAN misled Wasson investors concerning the fund’s value, distributed funds to investors that were contributed from other investors, and issued fraudulent account and fund performance statements. He pled guilty in November 2012, and was sentenced today by U.S. District Judge Robert P. Patterson.
Manhattan U.S. Attorney Preet Bharara said: “Anand Sekaran spun a web of lies and engineered a Peter-to-pay-Paul scheme all designed to deceive existing investors, lure new investors and cover-up his market losses while he benefited financially. Sekaran left many of his investors to suffer dire financial consequences, and now it is Sekaran who will suffer the consequences of his actions.”
According to the Information and statements made during the guilty plea and other court proceedings:
In 1997, SEKARAN formed Wasson as an asset management firm in New York, New York, that would invest client money primarily in the U.S. options market, and he solicited investors from 1999 through 2010. As a result of both the substantial losses Wasson incurred and several redemption requests, SEKARAN defrauded investors, by diverting their funds, and perpetrating a “Ponzi” scheme using two different methods, from 2009 through June 2011.
First, SEKARAN misrepresented Wasson’s investment value and past performance, the ways investor funds were being used to existing and potential investors, and the source of funds distributed to investors who had requested redemptions. Specifically, he misrepresented that Wasson was stable and doing well so that he could secure additional contributions. Further, in response to certain investor redemption requests, SEKARAN used money from other investors to pay off the redeeming investors.
Second, SEKARAN distributed fraudulent statements to investors in order to forestall redemption requests, induce new investors to contribute to Wasson, and induce existing investors to provide additional contributions. For example, he caused misleading and fabricated account statements to be sent to several Wasson investors that falsely inflated the value of their investments. SEKARAN also created and distributed fraudulent performance statements purporting to show that the Wasson fund was performing well, when in fact, it was suffering losses.
In the course of his scheme, SEKARAN misappropriated approximately $500,000 of investor funds. Further, more than 10 investors lost a total of approximately $2 million.
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In addition to the prison term, Judge Patterson sentenced SEKARAN, 44, of Miami, Florida, to three years of supervised release. SEKARAN was also ordered to pay $2.3 million in forfeiture, to make restitution in the amount of $2,264,998.12, and to pay a $200 special assessment fee.
Mr. Bharara praised the investigative work of the Criminal Investigators of the United States Attorney’s Office and the U.S. Postal Inspection Service, which jointly investigated this case. He also thanked the Securities and Exchange Commission for its assistance.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney David I. Miller is in charge of the prosecution.