U.S. charges Harvard grad over alleged Ponzi-like currency scam

Reuters News
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Posted: Jun 02, 2016 5:41 PM

By Jonathan Stempel

NEW YORK (Reuters) - A Harvard University graduate has been criminally charged with fraudulently causing almost $20 million of losses for clients after falsely touting her currency trading prowess and using new money to make Ponzi-like payments to earlier investors.

The U.S. Department of Justice charged Haena Park, a founder of Phaetra Capital GP and its predecessor Argenta Capital, with wire fraud and commodities fraud, according to a complaint filed on Thursday with U.S. District Court in Manhattan.

Park, 40, of Manhattan, was also civilly charged by the Securities and Exchange Commission and Commodity Futures Trading Commission, court papers show.

The defendant was arrested on Thursday morning and appeared in court later in the day, the Justice Department said. She was released on $150,000 bond.

Julia Gatto, a federal public defender representing Park, did not immediately respond to requests for comment. Phaetra did not immediately respond to similar requests.

Prosecutors said Park solicited more than $23 million from investors between 2010 and 2016 by touting herself as an "accomplished" trader who had generated high-double-digit annual returns.

In fact, Park was a "consistently unsuccessful" trader who lost $19.5 million of the $20 million she invested in currencies and highly leveraged futures, returned $3 million to earlier investors in a "Ponzi-like" fashion and sent bogus account statements to investors to conceal her losses, prosecutors said.

Authorities said Park lied to National Futures Association examiners in an April 4 interview by representing that she traded only her own money and that Phaetra had not been soliciting business.

According to the SEC, Park's victims included friends, family and former Harvard classmates.

The defendant graduated from Harvard in 1998 with a degree in psychology, school records show.

Park faces up to 20 years in prison on the wire fraud charge and up to 10 years on the commodities fraud charge. She also faces possible criminal and civil fines.

The cases in the U.S. District Court, Southern District of New York, are U.S. v. Park, No. 16-mag-03503; SEC v Park, No. 16-04103; and CFTC v. Park, No. 16-04120.

(Reporting by Jonathan Stempel in New York; Additional reporting by Anthony Lin and Nate Raymond; Editing by Bill Rigby and Leslie Adler)