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| Marlon Quan |
Thomas Petters is spending 50 years behind bars for his $3.5 billion Ponzi scheme. Now, a Connecticut hedge fund manager, Marlon Quan of Acorn Capital Group, is accused of funneling hundreds of millions of dollars to Petters.
The Securities and Exchange Commission charges that Quan and Petters hid “round-trip” transactions in which Petters wired $187 million to Acorn, and then Quan wired the money back to Petters. This gave the impression that Petters was meeting its obligations. Altogether, from 2001 through 2008, Quan raised almost $460 million, the bulk of which went to Petters.
Two other hedge fund managers, at Lancelot Investments, have already pleaded guilty to fraud charges for participating in the same kind of round-trip transactions with Petters. They too are doing time in the Big House.
Acorn and another Quan feeder fund, Stewardship Investment Advisors, received $90 million for their roles in the scheme. Now, the SEC is quite intent on getting that money back. It has asked to freeze Quan’s assets, including a payment of $14 million due today from the Petters trustee.
UPDATE
On Friday, a Minneapolis federal district judge, Ann Montgomery, halted the $14 million payment to Marlon Quan of Acorn Capital arising from the Thomas Petters Ponzi scheme. It was stopped on the day it was supposed to be paid.
"The money belongs to all of Mr. Quan's victims, not just some of them," the SEC's John Birkenheier said. "Investors in the U.S. will receive nothing."Half of the $14 million was slated for the Acorn hedge fund liquidator. DZ Bank, a Quan creditor, would have received almost $6 million, and another million would have gone to pay Quan's lawyers. Quan is not expected to personally receive any of the payment. Both sides have until April 14 to reach a settlement.
© 2011 Hedge Fund Writer LLC
