Paulie, those sirens are for you
commodities, wire fraud
More than two years after the Commodity Futures Trading Commission shut down the Philadelphia Alternative Asset Management Co, federal prosecutors have charged founder Paul Eustace with commodities and wire fraud.
The 13-page two-count indictment was released yesterday by the US Attorney for the Eastern District of Philadelphia. It charged that Eustace’s fraud on investors in funds operated by PAAM, and Option Capital Fund, an earlier venture, cost over $200 million, between Spring 2001 and Jun. 2005.
Among the accusations, Eustace (cough, cough) allegedly:
- Made ‘loans’ to himself from the funds;
- Transferred investors’ funds to his personal accounts;
- Used approximately $500,000 in investors’ funds to pay a legal settlement;
- Took incentive fees based on phony profits; and
- Created account statements that inaccurately depicted the health and viability of the commodity pools, showing the funds under his control were profitable when they were actually losing money.
Eustace, 42, lives in Oakville, Ont., a suburb of Toronto. At pixel time, it could not be established when he will be formally charged; if he fights extradition, it is likely to be months rather than weeks before he appears in court.
Denise Nadeau was not available for comment.
US v. Paul Eustace
Indictment: Counts One and Two
[Eustace] charged with bilking hedge fund clients of $200 million
Press release Nov. 8 2007
Earlier on NakedShorts:
Paulie, they’re coming for you
Oct. 17 2007
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