According to prosecutors, the fraud’s roots go back to July. A month earlier, Park Hill helped private-equity firm Irving Place Capital raise $500 million to restructure a fund from 2006, the client’s regulatory filing shows. Caspersen worked on that assignment, according to a person with knowledge of the matter.

Four months later, Caspersen e-mailed the manager of an international hedge fund and offered him the chance to earn a temptingly high return, according to the criminal complaint. The investment, which he claimed was related to the restructuring of the Irving Place fund, "offers private equity returns (15%) but without the risk," Caspersen said in an e-mail to another potential investor that was quoted in court documents.

No Connection

What the investor didn’t know was that the account receiving the money, Irving Place III SPV LLC, was actually controlled by Caspersen and had nothing to do with the Irving Place firm. PJT didn’t authorize Caspersen to raise the funds, prosecutors said.

A spokesman for the Irving Place private-equity firm said it had no knowledge of Caspersen’s scheme and was working with prosecutors.

Father’s Suicide

Caspersen’s family history has triumph and tragedy. His father, Finn M.W. Caspersen, ran the consumer-finance company Beneficial Corp. for almost two decades, after his own father had overseen it for 18 years. In 1998, it was bought out for more than $8 billion. He acquired estates in Florida and Rhode Island and donated to the Peddie School in New Jersey, Drew University and Harvard Law, which all of his four sons attended.

Then in 2009, he killed himself. According to reports from the time in the New York Times and Vanity Fair, he was weakened by kidney cancer and fighting with the Internal Revenue Service on suspicion of evading taxes in offshore bank accounts.

At Monday’s hearing, prosecutors said Andrew Caspersen was facing mental-health issues and had substance-abuse problems. Responding to questions from the court, Levy said he wanted to “be circumspect” about his client’s mental health, saying, “those thoughts were quite recent.” Magistrate Judge James Francis ordered Caspersen to receive counseling while he awaits trial.

Six Months