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Tuesday, August 1, 2017

GUILTY! Robert Buckhannon Pleads Guilty To One Count Of Conspiracy To Commit Wire Fraud; Sentencing Set For October 31, 2017

SCHEME TO DEFRAUD! 
“The objective of the conspiracy and scheme were to obtain money from investors by making false representations about the performance and profitability of hedge funds, their commissions and the safeguards over investors’ money. As a result of their misrepresentations, the defendants and their co-conspirators misappropriated $34 million they raised in hedge funds.”

Sealed Criminal Indictment; United States of America vs. Robert Buckhannon, 
Terry Rawstern
September 24, 2014

Robert Buckhannon plead guilty this morning in United States District Court in Las Vegas, Nevada, to the top count on his indictment: conspiracy to commit wire fraud.

In addition to the conspiracy count, Buckhannon, along with co-defendant, Terry Rawstern, was charged with one count of wire fraud.

(Rawstern plead not guilty at his October 1, 2014 arraignment, and his trial is set to begin on September 11, 2017.)

Buckhannon's plea agreement with filed with United States District Judge James C. Mahan, who accepted the guilty plea and referred the case to the probation department for investigation and report. Buckhannon's present terms of release remain unchanged.

If convicted on the conspiracy charge, Buckhannon faced up to 30 years in federal prison. In the indictment, the government announced its intention to seek a forfeiture money judgment of $44,800,000 from the two defendants.

According to the indictment, from April 2008 through April 2010, Buckhannon and Rawstern and co-conspirators were managing members of two Bradenton, Florida-based hedge funds, Arcanum Equity Fund, LLC and Vestium Equity Fund, LLC. 

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

The defendants then looted and bankrupted the hedge funds by taking payments on false and fictitious profits and taking improper and undisclosed loans. The indictment states that as a result of the defendants’ conduct, investors lost approximately $13.1 million. In April 2010, the hedge funds voluntarily filed for Chapter 7 bankruptcy and are now under the control of court-appointed trustees.

Buckhannon's MicroCann1260 dubious doobie business partner, Chris Paganes, was an unindicted co-conspirator and served as a trustee for the two hedge funds.

According to SEC documents, the “wrongdoing that underlies Paganes’s injunction occurred from August 2008 to at least May 2009 while he was a managing member of Imperium Investment Advisers, LLC (Imperium), an investment adviser registered with the Commission. During part of that time, he was also affiliated with Maximum Financial Investment Group, Inc. (Maximum), a broker-dealer formerly registered with the Commission. 

Maximum and Imperium served as trustee for a Bradenton, Florida-based hedge fund, Vestium Equity Fund, LLC (Vestium). Imperium and Vestium were parties to a trust indenture agreement that obliged Imperium to hold investor funds in a custodial account and to monitor Vestium’s investments to ensure the fund used investor proceeds only for uses specified in the fund’s offering materials. The trust indenture was incorporated into Vestium’s securities offering materials. 

Paganes also was the co-signatory for Vestium’s custodial bank account. He approved hedge fund transactions and disbursed investor funds for uses not permitted by the fund’s offering documents or the trust indenture. Paganes had a direct, undisclosed financial interest in at least one of the transactions he approved. This transaction created an undisclosed conflict of interest between him and the fund’s investors.” 

Tick-tock!

8 comments:

  1. Our federal justice system is messed up they need to start holding elections for federal judges.
    They let people with serious crimes continue running the streets hurting people and society as a whole.
    I never hear of a bond revoked or cash bond from these federal courts.
    But don't write a check or cash a stolen money order you just might get seven and a half to 14 years like me in State Court.

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    1. Why Robbie? One of the smartest and kindest guys I went to high school with. Never saw this coming. I feel sorry for his Mom

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    2. A lot can happen in 38 years, toots!

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  2. And to think he was our Salutitorian in our high schook class. His ex should be looked into also

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    1. Which ex? Tanya's deceased, but there's Marlena Michaels. Or maybe Eva Gallova Katz? Or do you mean high school sweetheart Kelly? Anybody I missed?

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    2. Kelly is the fiance who benefitted from being with Rob during his "wheeling & dealings". BTW: They weren't HS sweethearts. They both had other sweethearts. Their relationship started after they attended their 10 yr. reunion. Her seemingly happy marriage ended very soon after, allowing them to get together.

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