Earlier today, John R. Lakian, a manager of Capital L Financial Group, LLC (Capital L) and Aegis Capital Fund, LLC (Aegis Capital Fund), was sentenced to 55 months’ imprisonment, having pleaded guilty to two counts of securities fraud for defrauding investors out of millions of dollars in two separate schemes. The Court also ordered Lakian to pay restitution to the victims in the amount $15,640,582.46. The sentencing took place before United States District Judge Frederic Block at the federal courthouse in Brooklyn.
Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Lakian and his co-defendant stole millions of dollars entrusted to them by investors, many of them hard-working individuals who have been robbed of financial security in their retirement years by the defendants’ fraudulent scheme,” stated Acting United States Attorney Rohde. “This Office, together with our partners at the FBI, is committed to bringing to justice those who deceive the investing public in order to line their own pockets.”
“While Lakian and his co-defendant were living in the lap of luxury, those who invested not only their money with him, but their faith in him, were unwittingly funding this lavish lifestyle,” stated FBI Assistant Director-in-Charge Sweeney. “Today's sentencing should remind all investment fund managers of their obligation to put the interests of their clients ahead of their own. If you don't, we won't let you get away with it.”
Between 2009 and 2013, Lakian was involved in two schemes to steal investors’ money. In the first, he and his co-defendant, Diane Lamm, obtained more than $11 million by promising Capital L investors that their money would be used to purchase, consolidate, and sell registered investment advisory businesses. Instead, Lakian and his co-defendant diverted more than $3 million to themselves and to entities, including hospitality businesses, that they owned and controlled. In the second scheme, Lakian and his co-defendant embezzled money through their management of Aegis Capital Fund, a North Carolina-based investment fund that was placed into liquidation in 2011. Prior to the liquidation, Lakian and his co-defendant directed more than $2.4 million of Fund assets into hospitality businesses without informing the Fund’s investors that Lakian and his co-defendant owned and controlled these businesses. More than $1.9 million of the $2.4 million of fund assets was never recovered by the investors. Additionally, following the Fund’s liquidation, instead of returning investment proceeds to investors, Lakian and his co-defendant diverted more than $2 million of investors’ money to themselves and to their hospitality businesses. The government has identified credit card charges and company expenses or purposes unrelated to the purchase, consolidation and sale of registered investment advisers. Charges were incurred, for example, for clothing, furniture and fine art from luxury stores such as Bergdorf Goodman, Gucci, and Paul Stewart; stays at the Palace and Waldorf Astoria hotels in New York City; getaways at luxury resorts; and items for Lakian and his co-defendant’s restaurant business.
Lakian’s co-defendant, Diane Lamm, pleaded guilty in February 2016 to two counts of securities fraud and is scheduled to be sentenced on January 25, 2018.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Whitman G.S. Knapp is in charge of the prosecution. Assistant United States Attorney Karin Orenstein of the Office’s Civil Division is responsible for the forfeiture of assets.
JOHN R. LAKIAN
New York, New York
E.D.N.Y. Docket No. 15-CR-0043 (FB)