Boston Herald – Federal regulators yesterday moved to freeze the assets of a Wakefield hedge-fund manager who allegedly engaged in a Ponzi-like scheme that included diverting $11.5 million in client funds to a firm he co-founded with a college pal.<\/p>\n
The Securities and Exchange Commission said Frank J. Russo, 51, of Wakefield – via his firms FJR Corp., Russo Associates and Eliot Partners – raised as much as $25 million over the past 10 years from 160 investors, promising them returns of at least 10 percent.<\/p>\n
But when the 10 percent returns didn\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2t materialize, Russo began siphoning off money to a California firm that Russo co-founded with a friend from college, the SEC said yesterday in a complaint.<\/p>\n
\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cWhen that investment proved illiquid, (Russo and his firms) began a Ponzi scheme, using new investors to pay returns and redemptions to earlier investors,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d said the SEC. The feds added Russo\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s firms issued false financial statements to customers to deceive them into believing their money was safely invested in bonds, commodities and currencies.<\/p>\n