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2 Arrested, 1 At Large Accused Of Fraud In Hedge-Fund Scheme
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(May 4, 2009 - Monday) - http://online.wsj.com/article/BT-CO-20090501-713576.html
DOW JONES NEWSWIRES
Two men were arrested Thursday night on securities fraud and wire fraud charges and a third remains at large, authorities said Friday.
Daniel Ledven, 37, of Cresskill, N.J., and Alan Fishman, 49, of Brooklyn, N.Y., were each charged with one count of securities fraud and one count of wire fraud. Gary Gelman, 39, of Brooklyn faces the same charges but hasn't been caught.
The three were accused of fraudulently soliciting people to invest in a purported hedge fund managed by a company they controlled called A.R. Capital Group Inc. Between 2003 and September 2006, A.R. Capital raised about $20 million from individual investors and about $18 million of those funds were wired to bank accounts in Ukraine.
In summer 2006, the Securities and Exchange Commission launched an investigation of A.R. Capital and issued a subpoena for documents related to the business. The company and the fund stopped operations abruptly, with investors losing their money.
Both counts carry maximum sentences of 20 years in prison. The securities fraud count also allows for a $5 million fine, while the wire-fraud count calls for the greater of a $250,000 fine or twice the gross gain or loss resulting from the crime.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
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