NEW YORK (Reuters) – The founder of the now-defunct Platinum Partners hedge fund was sentenced on Tuesday to six months of home confinement over his role in what prosecutors called a scheme to defraud bondholders of an oil and gas company.
Mark Nordlicht was sentenced by U.S. District Judge Brian Cogan in Brooklyn, five years and one week after he was convicted, and following several post-verdict legal challenges.
Platinum once managed more than $1.7 billion in assets, before collapsing in what prosecutors labeled a $1 billion investment fraud.
Nordlicht was originally charged in December 2016. His sentence also includes a $5,000 fine.
Andrew Levander, a lawyer for Nordlicht, declined to comment. The office of U.S. Attorney Breon Peace in Brooklyn had no additional comment.
Nordlicht’s conviction stemmed from his alleged leadership of a scheme to defraud bondholders of Platinum-backed Black Elk Energy Operations, by rigging a vote to ensure that he and other insiders would receive proceeds of Black Elk asset sales.
The conspirators allegedly looted about $70 million prior to Black Elk’s 2015 bankruptcy, prosecutors said. Nordlicht was also Platinum’s co-chief investment officer.
Jurors found Nordlicht guilty of securities fraud, securities fraud conspiracy and wire fraud conspiracy, and acquitted him on other charges.
Cogan set aside the conviction and ordered a new trial, but a federal appeals court overturned that ruling. Nordlicht then appealed unsuccessfully to the U.S. Supreme Court. Cogan dismissed the wire fraud conspiracy count last July.
Prosecutors had asked that Nordlicht spend some time behind bars, saying a sentence without jail or prison would send a message that the “wealthy and powerful can get away with criminal conduct.”
Lawyers for Nordlicht sought time served, saying the father of six had already seen his reputation and life savings destroyed, and that additional deterrence was not needed.
Two co-defendants, former Platinum co-CIO David Levy and former portfolio manager Daniel Small, were sentenced respectively to time served and 10 months probation.
The case is U.S. v. Nordlicht, U.S. District Court, Eastern District of New York, No. 16-cr-00640.
Source: Economy - investing.com
