Andrew Caspersen admitted to scamming friends, family and a charitable foundation out of millions of dollars, telling a judge it was all due to a gambling habit that spiraled out of control.
Caspersen’s victims, including the foundation of billionaire Louis Bacon, lost $38.5 million, according to prosecutors. Paul J. Taubman’s PJT Partners Inc. fired Caspersen, 39, after disclosing the fraud the government.
Caspersen pleaded guilty Wednesday to securities fraud and wire fraud. He told U.S. District Judge Jed Rakoff that he tricked people into giving him money for investments he claimed would return 15 to 20 percent interest.
"There was no real investment opportunity," said Caspersen, who frequently choked up as he read through a prepared statement. "It was just a way for me to get money to feed a gambling addiction that was all-consuming at the time."
Caspersen agreed with prosecutors that federal sentencing guidelines call for him to get a prison sentence of more than 12 1/2 years. Rakoff, who will sentence Caspersen Nov. 2, has frequently criticized the guidelines and said at the plea hearing that they "border on the irrational."
Dramatic Fall
The plea marks a dramatic fall for the son of Finn M.W. Caspersen, the financier and philanthropist who ran Beneficial Corp. then sold it for almost $9 billion. Andrew attended Princeton University, and Harvard Law School’s student center is named after his family. He started gambling in law school, losing tens of millions of dollars, his lawyer Paul Shechtman said last month.
Caspersen gambled away almost $113 million on stock-option trades over a four-week period this year, Shechtman said earlier. He then defrauded investors out of $38.5 million and tried to solicit another $110 million, including $20 million from Bacon’s foundation and $50 million from a private equity firm, prosecutors said. One of his victims was the family of his late fiancee, who died in the 2001 terrorist attacks on the World Trade Center, Shechtman said.
“This is not a story of Wall Street greed,” Shechtman said in a June 14 interview. “This is the story of a person who had a serious mental health problem untreated until his arrest.”
Ponzi-like Fraud