NYC money man who faked royal role gets prison

AP News
Posted: Mar 23, 2011 3:50 PM
NYC money man who faked royal role gets prison

It sounded like a lucrative prospect with an impressive pedigree: A money manager who said he handled American investments for his royal Belgian family would let select outsiders join in financial plays with high, guaranteed returns.

But Guy de Chimay's royal ties were exaggerated and the promises were phony.

The debonair financier was sentenced Wednesday to three to nine years in prison, a range that reflects the possibility of parole. He pleaded guilty last month to grand larceny, securities fraud and other charges, admitting he conned clients out of about $7 million. He used some of their money to pay for homes in the Hamptons, his divorce lawyers' bills and car payments, authorities said.

"He's overcome with emotion. He's extremely remorseful," lawyer Martin Adelman told a judge Wednesday. De Chimay, 47, declined to speak.

A U.S. and Canadian citizen, de Chimay is distantly related to a line of Belgian royals who bear his surname and have lived for centuries in a castle in Chimay, the town where Trappist monks brew the beer of the same name. His grandfather was part of the family but renounced his ties and emigrated, Adelman said.

De Chimay said he was a prince's cousin and worked with him to invest more than $200 million in family money, according to the Manhattan district attorney's office and the Securities and Exchange Commission, which lodged civil fraud charges against de Chimay. He also claimed to have $40 million of his own, authorities said.

He used those lies and bogus bank statements to persuade a half-dozen people to put money into an investment vehicle that promised to return 12 percent a year by making short-term loans to real estate projects and carefully vetted companies, according to prosecutors and the SEC.

But "fraud contaminated every aspect of (that) investment vehicle," the SEC said in court papers last year. Clients' cash went to de Chimay's personal expenses, to some of his other ventures and investors and to pay rent for his firm, Chimay Capital Management Inc., the SEC said.

While some of the money did fund his personal life, the rest was invested and lost as de Chimay struggled to keep his business afloat after the 2008 financial crisis, his lawyer said.

"He went totally broke," Adelman said. De Chimay was arrested last June.

De Chimay resolved the SEC case by agreeing to refrain from violating securities laws, with the amount of any penalties yet to be determined, federal court records show.

He must pay more than $6.6 million in restitution remaining in the Manhattan criminal case. The payments would come from any future earnings.