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Steven Simmons was sentenced to 37 months in prison by U.S. District Judge Kimba M. Wood.
Simmons, who solicited over $6 million in investments for a hedge fund, misappropriated nearly $2 million of these funds for his own use and that of a co-conspirator, said Geoffrey Berman, the United States Attorney for the Southern District of New York.
Other investor funds solicited by Simmons were used by the owner of the Hedge Fund in the Ponzi-like scheme to make payments to prior Hedge Fund investors, Berman said. Simmons pleaded guilty before U.S. Magistrate Judge Barbara C. Moses on Oct. 30, 2017. He was arrested in January, 2017 as part of an investigation into another defendant’s alleged reselling of tickets to "Hamilton" and other shows.
“Steven Simmons lied to investors about how their money would be used and what returns they could expect," Berman said. "He used investor funds for his own personal use – including the purchase of a house – and provided other investor funds for use in paying back earlier investors. Now Simmons has been sentenced to more than three years in prison for his crimes.”
In one instance, Simmons solicited investment funds from one victim for the purpose of repaying an earlier investor in the hedge fund who had demanded the return of its investment.
Most of that victim's funds were, within minutes of their receipt by the hedge fund, wired to the earlier investor. The following day, $50,000 was wired by the hedge fund to an account controlled by Simmons.
In a later consensually recorded conversation with a cooperating witness, Simmons expressed concern that the victim would contact the portfolio managers and learn that “there’s no . . . money.”
As part of the fraudulent scheme, Simmons also created and provided investors with false monthly statements.
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