San Francisco Fund Manager Pleads Guilty to Fraud ConspiracySan Francisco Fund Manager Pleads Guilty to Fraud Conspiracy
The charges against Nicholas Mitsakos carry a maximum sentence of five years in prison, though he's expected to seek a lesser sentence of 30-37 months.
May 26, 2017
By Brendan Pierson
NEW YORK, May 25 (Reuters) - A San Francisco investment fundmanager pleaded guilty on Thursday to conspiring to defraudinvestors by fabricating an impressive investing track record,New York federal prosecutors announced.
Nicholas Mitsakos, who ran a fund called Matrix CapitalMarkets, pleaded guilty to one count of conspiracy to commitsecurities fraud and wire fraud in Manhattan federal court,prosecutors said.
The charge carries a maximum sentence of five years, thoughprosecutors expect to seek a lesser sentence of 30 to 37 months,according to a written plea agreement. As part of the agreement,Mitsakos agreed not to appeal a sentence of 37 months orshorter, and to forfeit about $861,000.
A lawyer for Mitsakos could not immediately be reached forcomment.
Mitsakos, 57, was arrested and charged in August 2016.
Prosecutors said he tried to lure investors to Matrix bytelling them he oversaw more than $60 million of assets andposted annual returns ranging from 20 percent to 66 percentbetween 2012 and 2015.
In fact, prosecutors said, Mitsakos managed no customerassets at all before receiving an investment of about $2 millionfrom a Cayman Islands fund in September 2015. He then spentabout $800,000 on personal expenses, and lost a significantamount of the $1.2 million he did invest, according toprosecutors.
"As he admitted in pleading guilty today, Nicholas Mitsakospurported to operate a successful hedge fund, but in reality, itwas a sham from the outset," Acting U.S. Attorney Joon Kim inManhattan said in a statement.
The case is USA v. Mitsakos, U.S. District Court, SouthernDistrict of New York, No. 16-cr-00631.(Reporting By Brendan Pierson in New York; Editing by TomBrown)
