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Press Release

Co-Founder Of Investment Fund Sentenced To 4 Years In Prison For Defrauding Investors Of Over $25 Million

For Immediate Release
U.S. Attorney's Office, Southern District of New York
Jason Rhodes Served as Chief Investment Officer and Chief Risk Officer While Defrauding Investors

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that JASON RHODES, the co-founder, chief investment officer, and chief compliance officer for Sentinel Growth Fund Management, LLC (“Sentinel”), was sentenced today by U.S. District Judge Sidney H. Stein to 48 months in prison for securities fraud, wire fraud, investment adviser fraud and conspiracy charges.  Those charges relate to RHODES’s participation in a scheme to defraud over 25 investors in Sentinel out of more than $25 million by lying to the investors and using investor funds for his own personal use and to make repayments to earlier investors in a Ponzi-like manner.   

U.S. Attorney Audrey Strauss said:  “Jason Rhodes defrauded investors in the fund he co-founded of more than $25 million through years of lies and deceit.  This conduct is made even worse by the fact that Rhodes served as the chief investment officer and Chief Risk Officer of Sentinel, roles in which it was his direct responsibility to safeguard investor funds.  Rhodes will now serve four years in prison for his crimes.”

According to the Indictment and other Court filings:

Beginning in at least 2013 and through in or about December 2016, RHODES, together with his co-conspirators, solicited investments in Sentinel by falsely representing to investors that their funds would be used for legitimate, specified, investment purposes, namely purchasing securities.  In fact, RHODES failed to invest the investor monies as promised, but rather diverted investor funds to his own personal use and the personal use of his co-conspirators and, in a Ponzi-like manner, used them to make repayments to other investors who were demanding their money.  Among other things, RHODES diverted investor funds to a trucking business operated by RHODES and his wife; used them to pay more than $1 million to settle an unrelated civil lawsuit filed against RHODES and one of his co-conspirators; and expended them on other, personal expenses including a resort stay in Dubai and a luxury time-share vacation club.  Through this scheme, RHODES and his co-conspirators defrauded over 25 investors out of more than $25 million.

Among other fraudulent acts, RHODES and a co-conspirator falsified an account statement for an investor (“Investor-1”) to conceal the fact that RHODES and his co-conspirators had misappropriated most of the $4.2 million Investor-1 had invested in Sentinel.  After Investor-1 discovered the fraudulent nature of the account statement, RHODES, working with others, obtained funds from yet another investor (“Investor-2”) in order to make payments to Investor-1.  RHODES and his co-conspirators then, on multiple occasions, created fraudulent reports for Investor-2, falsely reflecting that Investor-2’s funds were invested with portfolio managers in Sentinel’s brokerage accounts and were earning returns.  In truth and in fact, and as RHODES well knew, Investor-2’s funds had been almost entirely misappropriated upon their receipt to repay Investor-1 and were not being managed by portfolio managers on Sentinel’s platform. 

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RHODES, 48, of Rowayton, Connecticut, was also sentenced to three years of supervised release and ordered to pay restitution and forfeiture of $25,451,801.

Ms. Strauss praised the work of the FBI.  She also thanked the Securities and Exchange Commission for its assistance.  

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.  



Nicholas Biase, James Margolin
(212) 637-2600

Updated September 1, 2021

Financial Fraud
Press Release Number: 21-228