LawFuel – Legal Announcements – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced today the guilty plea of
BRET A. GREBOW, co-manager and trader of an investment fund known
as HMC International LLC (“HMC”), for defrauding investors of
more than $7 million. GREBOW pleaded guilty before United States
Magistrate Judge RONALD L. ELLIS to a one-count Superseding
Information charging him with investment adviser fraud.
According to the Complaint previously filed in the matter, the
Information, and statements made during today’s guilty plea
GREBOW established HMC around 2001 to pool investor
funds for the purpose of engaging in so-called “momentum trading”
in the U.S. equity markets. GREBOW represented to investors that
HMC achieved significant returns on investment, including
purported returns of (a) 68% in 2001, (b) 70% in 2002, © in
excess of 30% in 2003, and (d) in excess of 30% in 2004. In
fact, HMC had no substantial returns during those periods, and no
trading had taken place in HMC’s main brokerage account after
approximately March 2003. On the contrary, GREBOW operated HMC
as a classic Ponzi scheme, using new investor funds to pay
distributions and redemptions to existing investors.
GREBOW pleaded guilty to one count of investment
adviser fraud, which carries a maximum term of imprisonment of
five years, a maximum fine of the greatest of $250,000, twice the
pecuniary gain derived from the offense, or twice the pecuniary
loss to persons other than the defendant resulting from the
offense, and a maximum term of supervised release of three years.
GREBOW, 32, resides in Highland Beach, Florida.
GREBOW is scheduled to be sentenced before the
Honorable United States District Judge BARBARA S. JONES on
January 22, 2009.
Mr. GARCIA praised the work of the U.S. Postal
Inspection Service and thanked the Securities and Exchange
Commission for their assistance in the investigation of this
case. The Criminal Investigators of the United States Attorney’s
Office also investigated the case. Mr. GARCIA he investigation is
Assistant United States Attorney CHRISTOPHER L. GARCIA
is in charge of the prosecution.