Investor Fraud: Boston Hedge Fund Manager Pleads Guilty in Ponzi Scam Case, Ex-State Street Executive is Sentenced to 18 Months, and Willow Creek Fund Manger Must Forfeit $13M

Man Who Ran RMA Strategic Opportunity Fund Ponzi Scam Pleads Guilty

Raymond K. Montoya, a Boston hedge fund manager, has pleaded guilty to operating a multi-billion dollar Ponzi scam involving the RMA Strategic Opportunity Fund, LLC. Montoya pleaded guilty to multiple counts of mail fraud, wire fraud, and conducting an unlawful monetary transaction.

Montoya was charged and arrested last year. His victims included relatives, friends, and people he knew. They invested millions of dollar, including their savings and retirement funds.

According to prosecutors, the former hedge fund manager told investors that the fund was making good returns even though by 2014 it was losing money. Investors thought their money was going into bonds and stocks but, in truth, Montoya only invested part of their money both while taking the rest for his business and personal spending, including to buy luxury cars and pay for his son’s home mortgage.

Former Head of State Street’s Broker-Dealer Division Gets 18-Month Prison Term

Ross McLellan, the ex-president and EVP of State Street’s brokerage firm division, is now sentenced to 18 years behind bars for fraud. McLellan was indicted two years ago for his alleged role to defraud State Street’s transition management business. Earlier this year, the US Securities and Exchange Commission filed parallel civil charges against him.

McLellan and two now-former State Street managing directors were accused of adding commission charges to fixed-income trades and equity trades for six institutional clients and hiding these fees, which were not authorized.

A guilty verdict for securities fraud, wire fraud, conspiracy to commit securities fraud, and conspiracy to commit wire fraud was rendered against McLellan in June. The SEC’s securities case against him remains pending.

Willow Creek Fund Manager Pleads Guilty To Securities Fraud

Nicholas Genovese has pleaded guilty to securities fraud. Genovese persuaded investors to get involved in his Willow Creek Investments LP, raising about $13M from them.

He falsely claimed that he was the heir to the Genovese Drug Stores family wealth. He lied about earning his business degree at Dartmouth and being previously employed at Goldman Sachs (GS) and Bear Stearns.

Now, Genovese must forfeit $13.2M and two classic motorboats. He is facing 10 to 12.5 years in prison.

The SEC filed a parallel securities fraud case against him. The regulator contends that he inflated the assets his fund actually managed from about $10M to $30B and that he falsely claimed that the fund made 30-40% yearly gains when it was actually losing money.

Shepherd, Smith, Edwards and Kantas, LLP –SSEK Law Firm

Our investor fraud lawyers at Shepherd Smith Edwards and Kantas, represent individual and institutional investors throughout the US.

If you are an investor who suspects your losses may be due to fraud, the following may be grounds for an investor fraud claim.

• Misrepresentations and Omissions
• Negligence
• Churning
• Unauthorized commissions
• Unsuitable investment recommendations
• Unauthorized trading
• Failure to execute trades
• Inadequate supervision of your accounts or financial representative
• Breaches of Fiduciary Duty

These are just some of the reasons you may have cause to pursue a securities claim against a broker, investment adviser, or financial firm. To find out more and to schedule your free, no obligation case assessment, contact our securities fraud law firm today.

Fake Heir Cops To $13M Hedge Fund Scam, Faces 10 Years, Law360, October 19, 2018

Boston Hedge Fund Manager pleads guilty to fraud charges, BizJournals, October 18, 2018