Former Millennium Global Investments portfolio manager Michael Balboa was sentenced to four years in prison for defrauding investors by inflating the value of Nigerian sovereign debt by $80 million.

Balboa, convicted in December in a retrial in Manhattan federal court, had faced a possible life sentence because of the size of his fraud. The U.S. said investors lost more than $390 million based on Balboa’s misstatements.

The life sentence recommended under non-binding federal guidelines “vastly overstates the seriousness of the offense,” U.S. District Judge Paul Crotty said in imposing a lesser term today.

The judge also rejected the recommendation by U.S. probation officials for a 12-year sentence. He said leniency was warranted because Balboa, 45, was the sole means of his family’s support and because of his history and character.

Balboa, a London-based investment manager, was convicted of providing fake valuations to inflate month-end market prices on Nigerian warrants. The scheme generated millions of dollars in management and performance fees for which he earned as much as $6.5 million, prosecutors said.

Fund Liquidated

Balboa’s fund was liquidated by London-based Millennium amid the financial crisis. His portfolio had almost $1 billion in losses, the U.S. Securities and Exchange Commission said in a lawsuit against him.

Jurors convicted Balboa after a second trial in December of five counts including securities fraud and wire fraud, after the jury at his first trial was unable to reach a verdict.

Defense attorney Joseph Tacopina had suggested a prison sentence of one year to 18 months. He said prosecutors recognized at the trial that the fund’s collapse in October 2008 stemmed from the financial crisis and not Balboa’s actions.

A sentence of even 12 years would be “shocking,” Tacopina said.

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