A federal court has frozen the assets of a Boston-area money manager who allegedly stole $1.7 million from investors by creating a fictitious hedge fund and falsely claiming he was a math whiz who graduated from Harvard University.
The freeze was granted at the request of the Securites and Exchange Commission, which has filed a complaint alleging that Andrey C. Hicks of Boston and his firm Locust Offshore Management LLC (LOM) told clients they were investing in a billion-dollar hedge fund called Locust Offshore Fund Ltd.-a fund that did not exist. Instead, the $1.7 million LOM received from nine investors for LOM shares was deposited into company savings and checking accounts at TD Bank in Boston, according to the SEC. Hicks then transferred "substantially all" of the investor money into his personal checking and savings accounts, according to the SEC complaint.
The SEC also claims that Hicks, 27, falsely told investors that he earned undergraduate and graduate degrees at Harvard University, that he previously worked for Barclays Capital, and that the hedge fund held more than $1.2 billion in assets. The SEC also alleges that Hicks and his firm claimed that the firm's quantitative strategies were based on mathematical models that Hicks developed while at Harvard.
Hicks, the SEC claims, only attended Harvard's undergraduate college for three semesters and never graduated after twice being required to withdraw because of poor academic performance. Hicks only took one mathematics course during his time at Harvard, receiving a grade of D-, according to the SEC.
Hicks' offering materials stated that, while at Barclays Capital, he "grew his book nearly two-fold and expanded his group's assets under management to roughly $16 [billion]," but Barclays Capital has no record of employing Hicks, according to the SEC."Hicks lied to investors about virtually every aspect of his fictitious hedge fund. This brazen web of lies to investors constituted an outright fraud," said David P. Bergers, Director of the SEC's Boston Regional Office.
At the SEC's request, Judge Richard Stearns of the U.S. District Court in Massachusetts issued a temporary restraining order that freezes the assets of Hicks, his firm and the hedge fund.
In addition to freeze on LOM's and Hick's assets, the SEC also wants Hicks to surrender all ill-gotten gains plus pre-judgment interest, with the money to be be distributed to LOM investors.