Fund chief stole $11 million for limos, prostitutes, stock
NEW YORK, July 11 (Reuters) - The chairman of offshore investment fund Berkshire Korea Telecom Fund pleaded guilty on Tuesday to charges he defrauded investors out of $11 million that he used to pay for prostitutes, lease limousines and buy stock for his own account.
David A.X. Baker, who is also president and portfolio manager of the fund's investment advisor Baker Capital Parners, pleaded guilty to six counts of securities and wire fraud in Manhattan federal court.
Baker, 36, of Westport Conn., faces a possible maximum prison term of 10 years in prison.
According to the indictment, Baker made numerous false representations to about 15 individual and institutional investors, including that their monies would be placed in companies involved in the information and telecommunications industries in South Korea.
He also mislead investors to believe that the fund had generated historical returns far in excess of the performance of the Korean stock market and that KPMG, an internationally recognized accounting firm, served as the fund's auditors.
Baker admitted during his plea hearing that much of the money was never invested for clients but he had diverted it for his personal use to pay for prostitutes, to buy and lease cars and limousines, and to buy stock for his own corporate account.
19:16 07-11-00 |
