}

Saturday, July 15, 2017

CHANGE OF PLEA HEARING SET: “Crooked Chiropractor” Robert Buckhannon Set To Plead Guilty


Robert Buckhannon (above), who was ignominiously arrested by FBI agents at a Henderson, Nevada coffee shop on September 30, 2014, is set to plead guilty during an August 1, 2017 hearing before U.S. District Judge James C. Mahan. 

Buckhannon was released on a personal recognizance bond on October 1, 2014, and since then has continued his existence on the knife-edge of criminality with Zia Shlaimoun, a former hedge fund cohort.

Buckhannon and co-defendant, Terry Rawstern, of Aberdeen, S.D., were charged in a criminal indictment with one count of conspiracy to commit wire fraud and one count of wire fraud. Daniel G. Bogden, United States Attorney for the District of Nevada said the fraud was committed from 2008 to 2010. 

If convicted, Buckhannon could have faced up to 30 years in prison on the conspiracy charge, and up to an additional 20 years in prison on the wire fraud charge. The DOJ said they will also have to pay fines that can reach up to $1 million per count. According to the indictment (filed on September 24, 2014 and unsealed October 1, 2014), from April 2008 through April 2010, Buckhannon and Rawstern, along with some other co-conspirators managed members of two Bradenton, Florida-based hedge funds, Arcanum Equity Fund, LLC and Vestium Equity Fund, LLC. 

The DOJ said the defendants engaged in a fraudulent scheme to misappropriate $34 million they raised from investors by misrepresenting how they would use the investors' funds, along with misrepresenting that there were safeguards over the investors' money, such as an independent trustee and independent fund administrator. 

The DOJ said the defendants then looted and bankrupted the hedge funds by taking payments on false and fictitious profits, while taking improper and undisclosed loans. The indictment stated that as a result of the defendants' conduct, investors lost approximately $13.1 million. 

Buckhannon was accused of “secretly funneling at least $341,000 of investor money to his family and associates”, the indictment alleged. He spent $60,000 on an engagement ring for his fiancé (and now wife, Marlena Michaels, who is Zia Shlaimoun's first cousin) and $80,000 for a down payment on a Las Vegas house, the indictment alleged. 

In 2010, Buckhannon agreed to pay roughly $1.5 million to settle the SEC suit against him. That included returning $1.4 million to hedge fund investors and paying a $130,000 fine. But, as I reported on this blog August 14, 2014, Buckhannon never paid a penny of the settlement, a fact Assistant U.S. Attorney Kathryn Newman noted while arguing for Buckhannon's detention at his October 1, 2014 bond hearing. 

She also said hundreds of investors lost money in the scheme and “$13.1 million was still missing”. Newman argued that Buckhannon was “a flight risk, with relatives and co-conspirators living outside the United States.” 

Newman acknowledged that Buckhannon was “the target of an arson investigation stemming from a December suspicious fire at a bar he owned in Battle Creek.” 

As of today, no charges have been filed relating to the Battle Creek On Deck fire and the investigation remains open.

No comments:

Post a Comment