A small Boston-area hedge fund operation on Wednesday was accused of running a Ponzi scheme that included spending investor money on liquor, luxury hotels and specialty cars, according to a complaint by the top securities regulator in Massachusetts.
Secretary of the Commonwealth William Galvin said he has moved to bar three hedge funds and Yasuna Murakami, the man who operates them, from any securities business in the state. Galvin alleges Murakami operated the funds as Ponzi schemes while taking in about $15.3 million from at least 47 investors.
"This case represents a classic example of a shell game of moving the money from one investor to another with some left over to fatten the coffers of the money manager," Galvin said in a statement.
Galvin's complaint alleges that investors' money was used to cover expenses for luxury hotels, liquor stores, specialty cars, Nordstrom, Saks Fifth Avenue, and American Express, according to a statement from Galvin's office.
When summoned to testify before the enforcement section of the securities division, Murakami invoked his privilege against self-incrimination, the statement added.
Murakami was not immediately available for comment.
This article was provided by Reuters.