Wall Street financier Andrew Caspersen ’99 was arrested on Saturday and has been charged with fraud by federal prosecutors, according to a statement from the U.S. Attorney's Office.
Caspersen is allegedly responsible for creating an illegal $95 million scheme in which he incorporated illegitimate companies to funnel investments into a shell incorporation for his own gain, according to Assistant U.S. Attorney Christine Magdo.
“This is not an ordinary case. This is not an ordinary family with ordinary assets,’’ Magdo said during an oral argument in court.
Magdo deferred comment to the U.S. Attorney's Press Office . The U. S. Attorney's Press Office did not respond to multiple requests for comment.
Caspersen did not respond to multiple requests for comment.
Caspersen has been accused of one count of securities fraud and one count of wire fraud, according to a press statement released by the U.S. Securities and Exchange Commission.
“Caspersen allegedly put on a shameful charade – creating fake email addresses, setting up misleading domain names, and inventing fictional financiers," U.S. Attorney Preet Bharara said in a press statement.
The scheme allegedly began six months ago, when he worked as an executive for PJT Partners’ Park Hill Group. Promising high returns, Caspersen allegedlyduped a hedge-fund manager into wiring him millions last year, most of it from a charitable foundation. Besides the $25 million he received, Caspersen was also allegedly working to obtain another $70 million from investors, according to the statement.
Of the $25 million taken, only $40,000 has been recovered. According to the statement, Caspersen lost the rest betting on stock options within only four weeks in November.
According to the press statement released by the SEC, on March 7, the Caspersen’s victim company requested to speak with the executive from Coller Capital that had been listed on some of Caspersen’s forged investment documents. Caspersen allegedly set up a domain name similar to Coller’s that morning, and sent the victim company an e-mail that appeared to be written by the executive. Caspersen also proceeded to impersonate the Coller executive on a conference call.
In an e-mailed statement sent to Bloomberg, Coller stated that “at this stage, the firm has no reason to believe there was any wrongdoing by Mr. Caspersen during his time of employment with Coller.”
“No accusations have been made against Coller Capital or any current member of the firm’s staff,” the statement read.
A representative from Coller did not respond to requests for comment.
However, another employee of the victim’s hedge fund realized that the discovered domain had just been set up. The complaint filed by the U.S. District Court for the Southern District of New York stated that when the investor confronted Caspersen, Caspersen told his investor that he’d return the money by March 31.Caspersen has not returned the money as of Wednesday.
It is unclear whether Caspersen’s employer, financial services firm PJT Partners, did not notice his actions until two weeks ago, as PJT Partners did not authorize Caspersen to raise the funds.
PJT Partners released a statement saying the firm was “stunned and outraged to learn of the fraudulent circumvention of the firm’s compliance policies and ethical standards by Andrew Caspersen.”
The statement noted the firm has fired Caspersen, adding that they have conducted an internal investigation after learning of the potential wrongdoing and reported the results to the authorities. As of Wednesday, Caspersen’s page has been removed from the firm’s website.
A representative from PJT deferred requests for further comment to the statement, stating that they “are not in a position to provide any additional information at this time.”
Caspersen was released from custody on Monday on a $5 million bond according to the New York Post. Caspersen’s bail package requires that he seek treatment for substance abuse as a daily user of alcohol suffering from mental health problems, according to the New York Post. He is required to remain in the local area, which includes the Eastern and Southern districts of New York, New Jersey and Connecticut.
Caspersen graduated from the University with a degree in economics before enrolling at Harvard Law School.