Private Equity Executive Accused of Faking Investments

http://www.nytimes.com/2016/03/20/business/dealbook/private-equity-executive-accused-fake-investments.html

By ALEXANDRA STEVENSON and MATTHEW GOLDSTEIN MARCH 28, 2016


A former executive with a large private equity firm has been arrested and charged with securities fraud, federal prosecutors said on Monday.

Andrew Caspersen, a Harvard Law School graduate and a partner at the Park Hill Group, an advisory firm that up until last fall had been a part of the Blackstone Group’s advisory business, has been accused of seeking to defraud a number of institutional investors out of $95 million through fake private equity investments.

One investor duped by Mr. Caspersen was a charitable foundation affiliated with an unidentified New York hedge fund that had sunk nearly $25 million in the scheme. An employee at the hedge fund firm invested $400,000 with Mr. Caspersen.

“As alleged, Caspersen engaged in a brazen fraud by raising money under false pretenses and simply stealing the funds,” said Andrew M. Calamari, director of the Securities and Exchange Commission’s New York office. “This action amply demonstrates that even sophisticated institutional investors are not immune to financial scams.”

The S.E.C. said that Andrew Caspersen, a partner at Park Hill, solicited $95 million to invest in a shell company.

PJT Partners, the firm run by the investment banker Paul J. Taubman that now owns Park Hill, said in a statement that it had “terminated” Mr. Caspersen and was cooperating with authorities. The firm said that after learning of potential improper behavior by Mr. Caspersen, it conducted an internal investigation and reported the matter to federal prosecutors in Manhattan.

“Since the inception of our firm, an unconditional principle of integrity has been a core value as we build a lasting franchise,” said the statement from PJT Partners. “Our commitment to clients begins and ends with honesty and transparency, and strict adherence to these values is the absolute cornerstone of our firm.”

Mr. Caspersen’s lawyer, Daniel Levy, was not immediately available for comment.

Mr. Caspersen is a son of Finn M. W. Caspersen, a Wall Street financier and philanthropist who committed suicide in 2009, at a time when he was battling cancer and his name had become embroiled in an overseas tax evasion investigation.

Federal authorities said the scheme began last summer and ended only a few weeks ago. The S.E.C. said in its complaint that Mr. Caspersen had raised money through a fake investment vehicle he set up that sounded similar to the name of an actual investment vehicle, which also was a client of Park Hill.

Mr. Caspersen made up email accounts and invented employees and even went as far as to create a fake domain name, the authorities said.