Monmouth County, New Jersey, Man Admits Multimillion-Dollar Investment Fraud Scheme
CAMDEN, N.J. – A Monmouth County, New Jersey, man admitted today that he conspired to defraud 76 victims of more than $4 million and evaded paying more than $273,000 in taxes, Acting U.S. Attorney William E. Fitzpatrick announced.
Peter Zuck, 66, of Middletown, New Jersey, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of conspiracy to commit wire fraud and four counts of tax evasion.
According to documents filed in this case and statements made in court:
Zuck was a co-founder of Osiris Partners LLC and Osiris Partners Fund Limited. Starting in 2009, Zuck was employed in a management role with Osiris Partners LLC and Osiris Partners Fund Limited, including as a managing member and portfolio manager of the fund. Between June 2009 and November 2011, Osiris Fund Limited Partnership solicited 76 investors to invest $12 million in the Fund. Zuck, Michael Spak, who previously pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme, and other conspirators defrauded investors by concealing investments losses in the fund, misappropriating assets from the fund for their own personal use, and obtaining management fees based on a fraudulently inflated net asset value.
Zuck admitted that members of the Osiris Fund Limited Partnership diverted $4 million in investors’ funds from the fund and fraudulently drew $3.9 million in management fees to which they were not entitled.
Zuck also admitted that he was issued $1.3 million in checks in connection with his employment at Osiris Partners LLC and Osiris Fund Limited Partnership, which he used to pay for personal expenditures but which he did not report as income to the IRS. Instead, Zuck concealed his income by causing the checks to be deposited in an account that he controlled but that was in his son’s name and falsely assigning the income to his son on IRS forms. He admitted that he attempted to evade $273,417 in income tax.
The charge of wire fraud conspiracy to which Zuck pleaded guilty carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater. Each charge of tax evasion carries a maximum potential penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater. The information also includes a forfeiture provision for the fraudulent payments Zuck received from the scheme. Sentencing is scheduled for July 17, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou, David M. Eskew, and Shirley Emehelu of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Tim Anderson Esq., Red Bank