Preet Bharara, the United States Attorney for the Southern District of New York, and Ronald J. Verrochio, the Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that HEIDI WALKER, a former Managing Director of AIG Global Investment Group and Deutsche Asset Management and her ex-husband, PETER PFABE, each pled guilty yesterday in Manhattan federal court to one count of conspiracy to commit mail fraud and wire fraud.  WALKER and PFABE pled guilty before U.S. District Judge John F. Keenan and admitted that they conspired together to defraud Deutsche Asset Management and AIG Global Investment.

According to the Information and other documents filed in the case, as well as statements made at yesterday’s plea proceedings:

 Beginning in at least 2002, when WALKER was a Managing Director with Deutsche Asset Management and PFABE was Director of Global Institutional Marketing for an asset management division of another large bank, Deutsche Asset Management began receiving invoices from an entity called Saint Andrews Marketing, Inc. for such things as “Marketing and Review Services” and “company review and alert updates.”  Although many of the invoices were addressed to Deutsche Asset Management employees – or, in some cases, formerDeutsche Asset Management employees – other than WALKER, she was always the one who authorized payment. 

 After PFABE left his marketing job in 2003, Deutsche Asset Management received two large invoices from a new “vendor” called Greenwich Marketing Associates.  The invoices –
for $75,000 and $50,000 – were for conferences purportedly held and sponsored by Greenwich Marketing Associates.  Again, payment was authorized by WALKER. 

 When WALKER joined AIG Global Investment in 2006, AIG started getting invoices from Greenwich Marketing Associates – for items such as “editing services for investment commentary” and a “Client Investment Management Survey.”  Once again, WALKER authorized payment of all these invoices. 

Over the years, Deutsche Asset Management and AIG Global Investment paid Saint Andrews Marketing and Greenwich Marketing Associates hundreds of thousands of dollars.

Saint Andrews Marketing and Greenwich Marketing Associates were shams – companies set up by WALKER and PFABE to defraud WALKER’s employers.  Both companies were owned by PFABE.  For the duration of the scheme, WALKER and PFABE hid from Deutsche Asset Management and AIG Global Investment the true nature and ownership of the companies.  The checks the companies received from Deutsche Asset Management and AIG Global Investment were deposited in accounts that WALKER and PFABE had opened, and withdrawals from those accounts were used to pay for personal expenses and expenses related to the couple’s horse farm, Field Pointe Farm, in Salt Point, New York.

*          *          *

 WALKER, 47, and PFABE, 52, each face maximum sentences of five years in prison.  Under their plea agreements with the Government, they are also required to pay restitution to the victims of their offenses and to forfeit $200,000.  WALKER and PFABE are scheduled to be sentenced by Judge Keenan on June 28, 2012.

 Mr. Bharara thanked USPIS for its outstanding work in the investigation of the case.

 The case is being handled by the Office’s Complex Frauds Unit.  Assistant U.S. Attorneys Sarah McCallum and Justin Anderson are in charge of the prosecution.

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