Financial Advisor Sentenced for Money Laundering and Fraud
NEWPORT NEWS, Va. – Jeffrey A. Martinovich, 50, formerly of Newport News, was sentenced today to a total of 164 months in prison for charges of money laundering and fraud. Martinovich was also ordered to pay approximately $2.4 million in restitution to the victims of his fraud.
According to court documents, on Sept. 30, 2013, Martinovich was sentenced to 140 months in prison for his fraudulent manipulation of the assets in the Venture Strategies fund. His appeal of his convictions was denied by the U.S. Court of Appeals for the Fourth Circuit, and the case was remanded for resentencing. Today, Martinovich was again sentenced to 140 months in prison for Venture Strategies fund fraud, and then Martinovich was also sentenced to 63 months in prison for the fraud related to the Partners fund, with 24 months running consecutive to the 140 months, bringing his total penalty to 164 months in prison.
According to court documents, Martinovich was the head of MICG, a broker-dealer located in Newport News. In 2013, Martinovich was convicted by a federal jury in Newport News of charges related to his fraudulent inflation of assets in one of the hedge funds he managed and controlled as owner of MICG – the Venture Strategies fund. Following Martinovich’s convictions on May 6, 2013, it came to light that, beginning in 2010, Martinovich had wrongfully diverted the assets of another hedge fund he managed while at MICG (the Partners fund). Rather than make distributions to investors and satisfy redemption requests, Martinovich chose to use over $700,000 in investments in the Partners fund to pay for his living expenses and other costs. Once he was charged with his conduct related to the Venture Strategies fund, Martinovich utilized Partners fund monies to pay for his criminal legal defense, including payments to his defense attorney, expert witnesses, a jury selection consultant, and other litigation expenses. Martinovich falsely represented to his attorney, and took other steps to conceal the origin of these funds used for his defense. He was charged with his conduct related to the Partners fund on July 15, 2015, and pleaded guilty on May 13, 2016.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (ISR-CI), made the announcement after sentencing by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys Brian J. Samuels and V. Kathleen Dougherty prosecuted the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 4:15-cr-50 and 4:12-cr-101.