NEW YORK (AP) — A former executive at a New York investment bank who admitted defrauding investors of more than $38 million was sentenced to four years in prison by a judge who cited his gambling addiction as reason for leniency.
"I chose gambling over everything," Andrew Caspersen, 40, told U.S. District Judge Jed Rakoff in Manhattan.
In July, the graduate of Princeton University and Harvard Law School pleaded guilty to securities and wire fraud, admitting defrauding mostly family and friends of more than $38 million as he worked for PJT Partners Inc., which he also defrauded of over $8 million.
"I lost their money," he said. "I abused their friendship. I destroyed my family's name," said the son of the late Finn M.W. Caspersen, a prominent philanthropist and former chief executive of Beneficial Corp.
Still, Caspersen packed the courtroom with family and friends as well as members of organizations he has joined to fight alcohol and gambling addictions. Many of them argued for leniency in letters to the judge.
Rakoff credited Caspersen's "very real gambling disorder" as he imposed a prison term that fell well short of the 15 years called for by sentencing guidelines or the 7 ½ years recommended by the court's Probation Department.
Prosecutors said he scammed clients of PJT Partners into investing in sham private equity investments.
U.S. Attorney Preet Bharara said in a release that for over a year before his March arrest, Caspersen "duped his unwitting victims through an elaborate scheme involving made-up private equity ventures, fake mail addresses, and fictional financiers."
"Using his Wall Street pedigree, Andrew Caspersen deceived and defrauded investors — including his own family and friends and a charity — out of tens of millions of dollars," Bharara said.
When he addressed the judge, Caspersen said it took public humiliation for him to confront his gambling addiction, but that he was dedicated to continuing treatment.
Assistant U.S. Attorney Christine Magdo urged a lengthy prison sentence, saying Caspersen failed to follow through on gambling addiction treatment after squandering $2.25 million invested by his mother and a brother in 2012.
"He had a choice. He had a moment of intervention by outside sources," she said, adding that he quit therapy after only seven sessions.
Defense attorney Paul Shechtman said his client was so overtaken by his gambling illness that he hit a high of over $100 million one day and bet it all the next on whether the market would go up or down. As a result, he was left with nearly nothing at the end of the trading day, the lawyer said.
"This is madness," Shechtman said.
Shechtman said Caspersen's "moral compass was broken."
The lawyer said Caspersen fell for the classic gambler's fallacy.
"No matter how many times he lost everything, he was convinced he would win it all back," he said.