Federal prosecutors say a Connecticut hedge fund manager has pleaded guilty to fraud and other charges in connection with a Ponzi scheme that could potentially cost investors hundreds of millions of dollars.
Forty-two-year-old Francisco Illarramendi of New Canaan appeared Monday in U.S. District Court in Bridgeport. He faces up to 70 years in prison, restitution to investors and forfeiture of assets. A sentencing date has not been set.
Connecticut U.S. Attorney David Fein called it the largest white-collar prosecution ever brought by his office.
Prosecutors say Illaramendi, who ran Stamford-based Michael Kenwood Capital Management, used new investors' money to pay returns promised to earlier investors and created fraudulent documents to back up bogus claims about the investment funds.
He also faces civil action by the federal Securities and Exchange Commission.