Sunday, November 6, 2011

Fugitive hedge fund manager back in custody in NY (Reuters)

(Reuters) ? Hedge fund manager Brian Kim pleaded not guilty in New York state court on Friday to charges of running a $6 million Ponzi scheme and fleeing the country before his trial in a separate theft case.

The Manhattan District Attorney's office said Kim, 36, claimed he was an accomplished trader investing in stable securities, but in reality put his clients' money in highly speculative futures contracts that generated huge losses.

Kim, who ran Liquid Capital Management, also diverted "vast amounts of money" to himself, prosecutors said. Like notorious Ponzi schemer Bernard Madoff, Kim was accused by prosecutors of creating fake monthly statements for investors showing account balances with inflated gains.

In January, Kim fled to Hong Kong on the eve of a state court trial in Manhattan on charges he stole $430,000 in June 2008 from the condominium where he lived, prosecutors said. He was brought back last month, and is now in federal custody.

Kim was charged with grand larceny, forgery, scheming to defraud and other charges in connection with the hedge fund. He also pleaded not guilty to bail jumping.

Liquid Capital Management also has been indicted in connection with the Ponzi scheme case.

Kim still faces larceny and forgery charges in the condominium case. He also was arraigned on passport fraud charges last month in U.S. District Court in Manhattan.

Kim had surrendered his passport after being charged in the condominium case in 2009. He obtained another one fraudulently by saying his own was lost, according to his lawyer, Justin Levine. Hong Kong officials came to Kim's home there and eventually he was turned over to U.S. authorities.

(Reporting by Karen Freifeld)

Source: http://us.rd.yahoo.com/dailynews/rss/crime/*http%3A//news.yahoo.com/s/nm/20111104/us_nm/us_newyork_ponzi

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