Hedge Fund Manager Gets 6 Years for Defrauding Investors

Date: Tuesday, April 8, 2008
Author: Edvard Pettersson, Bloomberg.com

April 7 (Bloomberg) -- Marvin Friedman, who pleaded guilty in 2006 to defrauding investors in the Global Money Management hedge fund in San Diego that he managed, was sentenced to 6 years in prison.

Friedman was also ordered to pay $49 million in restitution, U.S. Attorney Karen Hewitt in San Diego said today in a statement.

Friedman admitted two years ago that he stole investors' money for his own use and lied to them about the fund's performance, according to the statement. He also admitted that he used money from new investors to pay returns to existing ones so that they wouldn't withdraw their funds.

``As a massive fraud masquerading behind an aura of legitimacy, Global Money Management was a huge tragedy for its investors,'' Hewitt said in the statement. ``Friedman betrayed the trust of these investors and today's sentence ensures the victims of his crime will receive some measure of justice.''

Charles Goldberg, a lawyer representing Friedman, didn't immediately return a call to his office.

The case is U.S. v. Friedman, 05-1010, U.S. District Court, Southern District of California (San Diego.)

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.