Former bank exec charged in $95M fraud scheme, victims included a charity

This Oct. 4, 2014, file photo, shows the facade of the New York Stock Exchange. Stocks are off to a mixed start Monday, March 21, 2016.
This Oct. 4, 2014, file photo, shows the facade of the New York Stock Exchange. Stocks are off to a mixed start Monday, March 21, 2016. AP Photo/Richard Drew

NEW YORK – An Ivy League-educated former executive at a New York investment bank was arrested Monday on charges he tried to defraud investors of more than $95 million as he led what a prosecutor called a “shameful charade” to cover his tracks.

Andrew Caspersen, 39, was charged in Manhattan federal court with securities and wire fraud after his Saturday arrest. Prosecutors said he scammed clients of PJT Partners Inc. into investing millions of dollars in sham private equity investments from July through March. After an initial court appearance, he was released on $5 million bail.

Dan Levy, a lawyer for Caspersen, declined comment outside court.

Caspersen has homes in New York City and suburban Bronxville, New York. He is the son of Finn M.W. Caspersen, a prominent philanthropist and former chief executive of the financial services firm Beneficial Corp. The elder Caspersen was found dead in 2009 of what authorities said was a self-inflicted gunshot wound.

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PJT Partners released a statement saying it was “stunned and outraged” to discover the fraud while Caspersen was a partner in its Park Hill Group.

It said it referred the matter to federal prosecutors after learning facts suggesting improper behaviour.

“To advance his $95 million fraud scheme, Caspersen allegedly put on a shameful charade — creating fake email addresses, setting up misleading domain names, and inventing fictional financiers,” U.S. Attorney Preet Bharara said in a press statement.

“When confronted by a suspicious client who had invested $25 million, Caspersen had no good answers.”

The Securities and Exchange Commission also filed civil charges against Caspersen, seeking a return of ill-gotten gains with interest and monetary penalties. It said that after graduating from Princeton University in 1999 and Harvard Law School in 2002, Caspersen was a principal at a private equity firm in London before he became a managing principal in January 2013 at the New York firm.

“As alleged, Caspersen engaged in a brazen fraud by raising money under false pretenses and simply stealing the funds,” said Andrew M. Calamari, director of the SEC’s New York Regional Office. “This action amply demonstrates that even sophisticated institutional investors are not immune to financial scams.”

Prosecutors said Caspersen fraudulently solicited investors by promising investments would be safe while he converted their money to his own use without their authorization.

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They said he used a portion of nearly $25 million from a charitable foundation to trade securities in his personal brokerage account, only to lose most of the money through aggressive options trading. The foundation has not gotten any of the money back, prosecutors added.

Before his arrest, Caspersen tried to solicit an additional $20 million from the same charitable foundation and a $50 million investment from another multinational private equity firm headquartered in New York, the government said.

If convicted of both charges, Caspersen could face up to 40 years in prison.


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