James H. McIntyre of Moore Capital Management has been identified as the hedge fund employee duped in an alleged $95 million fraud, DealBook’s Alexandra Stevenson and Matthew Goldstein report.
Last month, Andrew W. W. Caspersen, a former managing director at PJT Partner’s private equity arm Park Hill Group, was arrested and charged with securities and wire fraud related to the scheme.
The complaint said the 39-year-old defrauded a hedge fund-affiliated charity and an employee of the same hedge fund.
Shortly after Caspersen’s arrest, The Moore Charitable Foundation, an environmental charity founded by hedge fund billionaire Louis Bacon, said it was a victim.
“The Foundation was lied to by Andrew Caspersen, a managing director at investment bank PJT Partners, regarding a potential investment related to the publicly-announced restructuring of a private equity fund,” the foundation said in a statement. “The Foundation put approximately $25 million of its endowed funds toward the investment. The investment was made into an account that appeared to be for an Irving Place vehicle involved in the transaction, but actually was under the control of Mr. Caspersen.”
McIntyre, identified only as “Individual 1” in the complaint, was defrauded out of $400,000 by Caspersen, the New York Times said.
As the SEC’s Andrew Calamari put it, “even sophisticated institutional investors are not immune to financial scams.”
Messages seeking comment from McIntyre and a Moore Capital spokesperson were not immediately returned.
In October 2015, Caspersen reached out to McIntyre via email about a “new investment” he was working on and in which he was personally investing, the complaint said.
According to the complaint, Caspersen solicited money for a shell company he called Irving Place III SPV LLC. Irving Place sounded similar to Irving Place Capital Partners III SPV, a legitimate private equity fund that’s not associated with Caspersen. Caspersen falsely told investors that their investment would be secured by the $900 million of assets of Irving Place Capital Partners III SPV.
In November 2015, Caspersen received $24.6 million from The Moore Charitable Foundation and $400,000 from McIntyre. McIntyre evaluated and recommended investments for The Moore Charitable Foundation, the complaint said.
Caspersen’s Irving Place had “no legitimate business operations,” the complaint said. Instead, of investing the money, Caspersen placed it in a brokerage account for his “personal use.” He lost most of it from “aggressive options trading.”
In early March, tried to solicit another $20 million from The Moore Charitable Foundation and another $50 million from an unnamed New York-based multinational private equity fund.
When questions were raised by McIntyre, Caspersen allegedly created fake email addresses, and misleading domain names, and invented fictional financiers in an attempted cover up, the complaint said.
A representative at Moore Capital discovered that one of the email domain addresses had been created approximately 20 minutes after McIntyre questioned Caspersen in a telephone call. The Moore Capital rep also learned that one of the financiers Caspersen had referred to did not exist.
That’s when the Moore Charitable Foundation contacted PJT’s general counsel:
“When the Foundation detected irregularities in a proposed follow-on deal, it swiftly notified PJT Partners’ General Counsel’s Office and cooperated with PJT in their investigation of the issue. Importantly, the Foundation did not wait to recover its investment before contacting PJT Partners, which could have subjected some other innocent victim to Mr. Caspersen’s fraud.
After PJT informed the Foundation that it had contacted the U.S Attorney’s Office for the Southern District of New York, the Foundation separately placed a call to the US Attorney to inform them how it initially discovered the fraudulent activities.
The Foundation has since cooperated closely with the U.S. Attorney’s Office for the Southern District of New York and with the SEC, helping to bring this massive fraud to light, protecting future victims and ensuring that the perpetrators of the fraud are brought to justice. The Foundation will continue to aid PJT partners and the government in their investigations, including on efforts to be made whole on the Foundation’s investment for the benefit of important conservation efforts.”
PJT Partners terminated Caspersen for cause.
“Since the inception of our Firm, an unconditional principle of integrity has been a core value as we build a lasting franchise. Our commitment to clients begins and ends with honesty and transparency, and strict adherence to these values is the absolute cornerstone of our Firm,” PJT said in a statement.
Caspersen was released on $5 million bond. As part of the condition for his release, Caspersen must under go mental health evaluation and treatment, the court documents show.
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