WESTCHESTER COUNTY, N.Y. - An investor from Westchester working in Manhattan was one of seven Platinum Partners employees charged Monday morning with participating in a near $1 billion fraud case by the U.S. Attorney.
According to The Wall Street Journal, Mark Nordlicht of New Rochelle, a founding partner and Chief Investment Officer for Platinum Partners was arrested in his New Rochelle home and taken into custody for charges filed in federal court on Monday in Brooklyn.
Others arrested include Nordlicht’s co-Chief Investment Officer David Levy, and Uri Landesman, the former president of Platinum Partner’s signature fund, the Wall Street Journal reports.
The indictment states that for four years, the three partners schemed to defraud investors by overstating and overvaluing assets they were managing. The indictment includes emails between the three men that “illustrates their knowledge and awareness of the fraudulent scheme perpetrated on investors and prospective investors.”
“Specifically, Platinum fraudulently overvalued some assets in order to, among other things, boost performance numbers, attract new investors, retain exiting investors and extract high management and incentive fees,” the indictment reads.
At its peak, Platinum Partners claims that it managed nearly $1.5 billion in investor assets. The firm was reportedly raided by the FBI earlier this year, according to the Wall Street Journal. Platinum Partners is also in the process of liquidating several hedge funds.
“Platinum’s overvaluations of some of its assets precipitated a severe liquidity crisis, which Platinum initially attempted to mitigate through high-interest loans between its hedge funds,” attorneys claim in the indictment. “When the loans proved insufficient to resolve liquidity problems, Platinum began selectively paying some investors ahead of others, contrary to the terms of its governing documents.”
The complete charges are expected to be announced by Brooklyn United States Attorney Robert Capers and Andrew Ceresney, the director of enforcement for the U.S. Securities and Exchange Commission late on Monday afternoon.