Fraud Spotlight: Another Day, Another Hedge Fund
Fraud in NJ
According to authorities, another classic Ponzi scheme has hit the state of NJ.
Daniel Dragon of Lebanon, NJ and Carmelo Provenzano of Garfield, NJ have pleaded guilty to wire
fraud in a Camden, NJ courtroom. This guilty plea comes on the heels of accusations of fraud against
a Jersey City, New Jersey based fund and Osiris Partners.
In this case, Dragon and Provenzano told investors that:
The firm had created a proprietary black box computer algorithm
that had produced returns of 170% from 2009 to July 2011 in the
Investors could get their money back at any time with only one day’s notice.
When some investors started asking questions the duo emailed investors screenshot of fictitious
investor account statement from a completely made up investor named Mel Tannenbaum.
The entire operation was a fraud and investors lost more than $3.5 million. Dragon and Provenzano
used the money they stole to furnish an extravagant lifestyle, which included giving a $4,000 tip on
an $18,241 bar bill in a Los Angeles nightclub. The two men face up to 20 years in prison and
$250,000 in fines.
A third co-conspirator named George Sepero is currently awaiting trial.
Originally posted in the August 2012 edition of Corgentum Consulting's Operational Due Diligence
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Corgentum Consulting is a specialist consulting firm which performs operational due diligence
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worth individuals, and family offices to conduct the industry's most comprehensive operational due
diligence reviews. Corgentum's work covers all fund strategies globally including hedge funds, private
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diligence allows Corgentum to ensure that the firm's clients avoid unnecessary operational risks.
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