Stephen Colangelo Jr. Admits Guilt in $2.7 Million Fraud Scheme
Stephen Colangelo Jr., a hedge fund manager, pleaded guilty to two counts of securities fraud and two counts of wire fraud at the U.S. District Court in Manhattan.
Colangelo initially created and controlled a hedge fund called the Brickell Fund L.L.C. under which he misrepresented himself as an investment manager seeking to manage the investment of interested parties for a nominal management fee based on his trading success.
In reality, Colangelo was actually misappropriating the fund to pay for his personal expenses. Colangelo also raised additional funding, after exhausting the Brickell Fund, through three other companies he had created, namely the Hedge Community, Start A Hedge Fund, and Under the Radar SEO.
In both cases, Colangelo repeatedly misled investors by making numerous misrepresentations regarding the ventures profitability, and by the use of falsified performance statements and other business documents. These documents included an explanation to his supposed trading strategy, as well as proof of its supposed efficiency.
Colangelo was found to have defrauded investors in the amount of $1.6 million in connection with the Brickell Fund, and an additional $1.1 million in connection with his other business ventures.
Colangelo has originally been allowed to post bail in the amount of $250,000 since his initial arrest on Nov. 19, 2012. He now faces up to 20 years for each count of fraud, and could end up serving a total of 80 years in federal prison on sentencing.
The Peiffer Wolf securities attorneys often represent investors who lose money as a result of Ponzi schemes, investment fraud, or stockbroker misconduct. They are currently investigating the possibility of assisting investors with the recovery of their losses. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment fraud or misconduct may contact the securities lawyers at Peiffer Wolf, Jason Kane or Joe Peiffer, for a free, no obligation evaluation of their recovery options, at 585-310-5140.