A federal judge on Thursday sentenced the former chief financial officer of Ridgefield hedge fund New Stream Capital to a year in prison for engaging in a scheme to deceive investors, according to the Connecticut U.S. Attorney’s office.
Richard Pereira, 43, pleaded guilty last year to one count of conspiracy to commit wire fraud, after investigators alleged that he and his two business partners lied about closing a fund in Bermuda.
Pereira, David Bryson and Bart Gutekunst told their investors that they would need to move their money from that fund to another fund in the Cayman Islands.
Investors did so, but the Bermuda fund’s largest investor decided to place a redemption on its investment. In order to keep that investor’s money invested, the three men secretly kept the fund open and restructured it to give the large investor priority status over its Cayman fund investors. The fund eventually failed, and the scheme defrauded investors out of more than $46 million, according to officials.
Pereira received $700,000 from New Stream in 2008. Bryson and Gutekunst, who each collected more than $500,000 in fees and profits, received longer sentences — 33 months and 30 months, respectively.
The FBI, U.S. Department of Labor and the Office of the Inspector General investigated the case, with assistance from the U.S. Securities & Exchange Commission.
