Man gets prison for stealing $1.7M from hedge fund investors
SAN DIEGO — A man who ran a hedge fund Ponzi scheme, duping local investors and stealing $1.7 million for travel, shopping sprees and entertainment, was sentenced Monday to five years in federal prison.
Paul Moore IV, 51, told investors he was an experienced financial professional and investment advisor and had worked as a senior analyst after earning an undergraduate degree in economics, when in reality he was a college dropout and had never worked for the securities firm he touted, United States Attorney Laura Duffy said.
Moore established Coast Capital Management LLC in 2009 and began soliciting friends and acquaintances to invest in his hedge fund, Duffy said.
Moore stole most of his clients’ funds — taking $1.7 million of his clients’ $2.8 million for personal travel, shopping sprees, meals and entertainment, Duffy said.
“People are out a lot of money while you were out living the high life,” U.S. District Court Judge Cynthia Bashant told Moore during the sentencing.
To keep the scheme going, Moore would pay the investors who asked to be redeemed with the investment funds provided by recent clients. Moore also created and distributed false account statements showing a high return on his clients’ investments, Duffy said.
Duffy warned investors to research a potential investment adviser before handing over their money. More information on how to avoid Ponzi schemes is available at the Securities and Exchange Commission’s website.