The co-founder of a Connecticut hedge fund firm pleaded guilty to charges that he defrauded investors of almost $20 million in a Ponzi-like scheme.
Jason Rhodes of Sentinel Growth Fund Management LLC was facing conspiracy and fraud charges in Manhattan federal court. He is scheduled to be sentenced on April 6.
According to prosecutors, Rhodes, 47, of Rowayton, Connecticut, and his co-conspirators raised funds from about two dozen investors from 2013 to 2016, telling them their money would be invested in the market. But the money was instead diverted to a a variety of personal uses.
These included a $1 million payment to settle an unrelated civil lawsuit, a trip to Dubai, a luxury time-share and a trucking company Rhodes co-owned with his wife. Some of the funds were also used to repay an investor who had placed $4.2 million in the fund after the investor discovered the money had been misappropriated.
A lawyer for Rhodes could not immediately be reached for comment.
Another Sentinel co-founder, Mark Varacchi, previously pleaded guilty to fraud and agreed to cooperate with prosecutors.
The charges against Rhodes carry statutory maximum penalties of between five and 20 years in prison.
This article was provided by Bloomberg News.