Daniel Marino was sentenced for defrauding investors of more than $450m
A US fraudster, Daniel Marino, has been sentenced to 20 years in prison for defrauding investors, in the now-collapsed Bayou hedge funds, of more than $450m.
The sentence was imposed by a Manhattan federal court. Marino had pleaded guilty to conspiracy, investment adviser fraud, mail fraud and wire fraud.
In imposing the sentence, the judge said that she was sending a message that people entrusted with other people’s money have an obligation to be truthful and forthright.
According to publicly filed documents, between 1996 and August 2005 the funds sustained consistent losses. Investors, however, were regularly told that the funds were reaping substantial gains.
Marino, who was the chief financial officer and chief operating officer of Bayou, admitted that Samuel Israel, III, the chief executive officer of Bayou, along with James Marquez, hatched a scheme in 1998 after the fund sustained a second year of losses.
“Marino was remanded to begin serving his sentence in a federal prison. The Court also ordered that Marino pay $300m in restitution to his victims.
According to publicly filed documents, the Bayou funds collapsed in August 2005, after the fraudsters attempted to recoup mounting losses by investing contributions to the funds in private placement transactions in the United States and abroad.
Israel pleaded guilty on September 29, 2005, to conspiracy, investment adviser fraud and mail fraud. He is awaiting sentencing.
Marquez pleaded guilty on December 14, 2006, to conspiring to defraud Bayou investors. He was sentenced to a term of 51 months’ imprisonment; the Court also ordered that Marquez pay over $6m in restitution to his victims.
In October 2006, an Arizona Superior Court issued an order directing that over $106m, representing proceeds of the fraud, along with accrued interest, was transferred to the United States Marshals.
Marino was remanded to begin serving his sentence in a federal prison. The Court also ordered that Marino pay $300m in restitution to his victims.
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