The Securities and Exchange Commission said the money should help victims of Francisco Illarramendi, a Venezuelan-American accused of running a pyramid scheme that exposed investors to hundreds of millions of dollars in potential losses. A pension fund for Venezuela’s state oil workers accounted for most of the investment.
“We’re pleased with the return of this money to the U.S. and believe it will help preserve these assets for the benefit of defrauded investors,” said David P. Bergers, director of the SEC’s regional office in Boston.
Illarramendi, who lives in New Canaan, Conn. faces up to 70 years in prison after pleading guilty in March to criminal charges including several counts of fraud and conspiracy to obstruct justice. He was accused of transferring money among investment accounts without telling clients to cover up huge financial losses and then falsifying documents to deceive investors, creditors and investigators.
The money in the offshore account came from one of Illarramendi’s firms, Highview Point Partners LLC of Stamford, Conn., which was added as a defendant in the case in May. Three hedge funds managed by the firm were suspected of holding funds tainted by the pyramid scheme.
A federal judge in Connecticut on June 16 ordered a freeze of the hedge funds’ assets, including the $230 million, and ordered them returned to the United States. The money was received last week, the SEC said in a court filing Tuesday. Authorities declined to name the location of the offshore bank.
The New York attorney assigned to secure victims’ assets, John Carney, has a Sept. 30 deadline to file his accounting. At the end of March, the balance in the receivership account was about $5.1 million, according to court documents.
An attorney for Venezuela’s state-owned oil company, Petroleos de Venezuela, did not respond immediately to a message seeking comment.