Andrew Caspersen Pleads Guilty To $40M Fraud

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Andrew Caspersen Pleads Guilty To $40M Fraud

Andrew Caspersen, an ex-Wall Street executive and descendant of a wealthy family, pleaded guilty this week to federal charges that he defrauded friends, family, and a hedge fund billionaire’s foundation out of almost $40 million. He pleaded guilty to one count of securities fraud and one count of wire fraud, each of which carries a maximum penalty of twenty years imprisonment.

Caspersen’s decline is nearly unfathomable. He is an Ivy-League educated financier whose attorney claimed that a “compulsive gambling addiction and mental illness” forced him to orchestrate and run a Ponzi-like scheme.

“The people I harmed were people I cared for the most,” Caspersen said, reading from a statement. His voice wavered as he stumbled over the last words, “I could not be more sorry or ashamed for my crimes.”

The plea was expected. His attorney stated that Caspersen would not fight the charges. It is yet to be seen whether Federal Judge Jed S. Rakoff will be lenient in his sentencing, taking into account Caspersen’s mental health issues as a mitigating circumstance.

In his plea agreement, the former financier agreed to a prison sentence of twelve to sixteen years, subject to approval by Judge Rakoff. He may also be forced to pay a fine of over $5 million and restitution to his victims.  However, Judge Rakoff stated in court this week that be believed the federal sentencing guidelines to be “irrational.”

Caspersen used his connections from Groton School, Princeton, and Harvard Law School to find new sources of cash for his operation, which guaranteed annual returns of fifteen percent through a private equity-like investment vehicle, according to the prosecution. A large portion of the cash raised from friends was lost on questionable bets in the market, according to his attorney, Paul Shechtman.

Caspersen traded one-week put options that allowed him to bet on a decline in the Standard & Poor’s 500-stock index. He was bold in his bets, telling his broker to trade all the cash in his account each week, according to his attorney.

That account held $112.8 million as recently as February 1, which would have been enough for Caspersen to easily pay back the $38.5 million that he owed to his family and friends. Instead, he continued to gamble the money through all-in bets against the market.

In the last ten years, Caspersen lost over $20 million of his own money and family inheritance, lured into making trading bets after starting with casino gambling and sports betting, his lawyer said. He added that Caspersen and his wife recently sold their multimillion-dollar home in Bronxville, New York.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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