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Plea deal reduces 16 mail fraud charges to 2 for Baton Rouge man

By the time a Louisiana resident is notified he or she is part of a federal investigation, the government has already had substantial lead time to gather evidence and prepare to prosecute. Allegations of white collar crimes are serious charges with equally devastating penalties. You don't have to wait to be a defendant to need legal protection.

A 59-year-old man, the former operator of Greenwing Capital Management LLC in Baker and Baton Rouge, will be sentenced on mail fraud charges. Originally, federal prosecutors charged the defendant with 18 counts, but all but two counts were dropped, according to terms of a plea deal. In return for the reduced charges, the ex-hedge fund owner pleaded guilty to a multimillion-dollar investor scam.

Investors in four states had money with Greenwing Capital in 2008 during the height of the recession. The hedge fund investments were performing poorly, and some failed entirely. However, the defendant said he kept the bad news from investors for months and used his clients' money to stay in operation or for personal reasons.

Statements sent to investors between February and October 2008 painted a rosy picture of profits. In fact, some investments had dried up months before. In mid-October, the defendant sent investors letters informing them that all but a fraction of the investments were lost, but concealed when the losses occurred.

A bankruptcy trustee for the defendant estimated investors lost approximately $9 million, although a federal prosecutor last year claimed the amount was $13 million. A conviction for a single count of mail fraud can mean a fine up to $250,000 and a 20-year term in prison. The defendant agreed not to dispute any orders to forfeit assets.

Sometimes, the evidence against a defendant is indisputable. It may appear you have no options left, but that may not be the case. Plea negotiations offer new opportunities to have charges dropped or reduced.

Source: The Advocate, "Hedge fund owner pleads guilty to mail fraud" Bill Lodge, Jul. 13, 2014

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