New York Investment Fund Managers Plead Guilty For Orchestrating Two Multi-Million Dollar Fraud Schemes
Defendants Used Investors’ Money to Pay for Other Business Ventures and Personal Expenses
Earlier today, John R. Lakian and Diane W. Lamm, who managed Capital L Financial Group, LLC (Capital L) and Aegis Capital Fund, LLC (Aegis Capital), each pleaded guilty to two counts of securities fraud for defrauding investors out of millions of dollars in two separate schemes. When sentenced, the defendants face a maximum sentence of 20 years’ imprisonment on each count.
Today’s guilty pleas were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“The defendants played a confidence game, stealing investors’ hard-earned money through lies and deceit to use for their own purposes” stated United States Attorney Capers. “We remain steadfast in our commitment to the investigation and prosecution of those who prey on investors and enrich themselves by means of financial fraud.”
“Lakian and Lamm misled investors, and capitalized on their misfortune, in an effort to bolster their own financial portfolios. The FBI and our partners will continue our efforts to bring to justice those who employ schemes to take advantage of unwitting victims,” stated FBI Assistant Director-in-Charge Rodriguez.
Between 2009 and 2013, the defendants were involved in two schemes to steal investors’ money. In the first, the defendants 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 Lamm diverted more than $3 million of it to themselves and to entities they owned and controlled. In the second scheme, the defendants perpetrated their fraud through their management of the liquidation of Aegis Capital, a North Carolina-based investment fund. Instead of returning investment proceeds to investors, Lakian and Lamm diverted more than $2 million of investors’ money to themselves and to restaurant businesses they controlled.
Today’s pleas took place before United States District Judge Frederic Block at the United States Courthouse in Brooklyn, New York.
The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Whitman Knapp is in charge of the prosecution.
This prosecution was the result of efforts by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 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. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
JOHN R. LAKIAN
New York, New York
DIANE W. LAMM
New York, New York
E.D.N.Y. Docket No. 15-CR-0043 (FB)