New York (HedgeCo.Net) – An eight-count federal indictment has been returned charging Geoffrey W. Nehrenz for his role operating a hedge fund Ponzi scheme in which 19 investors were defrauded out of approximately $5.5 million, law enforcement officials said.
Between October 2009 and September 2013, Nehrenz promoted and sold investment contracts to clients through Keystone Capital Management, LLC (KCM) an investment adviser company located in Uniontown, which is an Ohio limited liability company registered as an investment adviser firm, but not registered with the Securities and Exchange Commission.
Rather than investing the funds, Nehrenz used client money to pay his personal expenses, to pay business expenses to promote and prolong his investment scheme, and to make speculative, high-risk trades with domestic and overseas private placement vehicles without his clients’ authority, transactions known as “side pocket investments,” according to the indictment.
“This defendant took advantage of people who trusted him and used their hard-earned money to fund his lifestyle,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Nehrenz faces one count of securities fraud, three counts of wire fraud, one count of mail fraud, one count of fraud by an investment advisor, and two counts of money laundering.
Alex Akesson
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