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June 16th, 2016 
Awake Goy Earlier this year we profiled Andrew Caspersen’s arrest. As a quick reminder, Caspersen is a 39 year old Harvard Law graduate and former partner at the Park Hill Group (formerly owned by Blackstone) who has been accused of defrauding investors through fake private equity investments.
Federal prosecutors claim that Caspersen ran a Ponzi scheme that defrauded friends, family and a hedge fund foundation out of nearly $40 million over an 18-month period, and in court on Tuesday Caspersen gave his reason for that – he just has a gambling problem.
From the NYT
But on Tuesday, Mr. Caspersen’s lawyer contended that his client, a former Wall Street executive with an Ivy League pedigree, was the victim of an uncontrollable gambling addiction that drove him for more than a decade. So gripping was Mr. Caspersen’s addiction, the lawyer said, that he checked his phone throughout the day for updates on the stock market’s direction and his “all in” bearish bets that ran into tens of millions of dollars.
Dressed in a black suit and pink tie at his arraignment in a Manhattan federal courtroom Tuesday afternoon, Mr. Caspersen, 39, told a judge that he had been treated for “compulsive gambling and mental health illness” issues since his arrest in March.
Brilliant, as if all of Wall Street and those even remotely connected to it aren’t gambling on prices every day, and using their phone’s constantly to see how the market is doing.
Caspersen’s lawyer, Paul Shechtman, continued to try and drum up sympathy by telling the court that the addiction had built over time.
Mr. Shechtman described Mr. Caspersen’s addiction as having started with casino gambling and sports betting, and quickly turning into betting on the stock market while he was a student at Harvard Law. Mr. Caspersen’s father and brothers all attended Harvard, where a student center at the law school is named for the family.
As recently as February 11, Caspersen had $112.8 million in a brokerage account according to the NYT, and could have very easily paid back the nearly $40 million owed to those who trusted him with their money. However, the very next day Caspersen ordered his broker to place a new round of all-in bets that the market would fall that week. As it turns out, Caspersen timed the bottom perfectly – but had bet the wrong way. The market subsequently rose, resulting in Caspersen losing nearly all of the money. On March 9, Caspersen had $3.35 million left, and on March 26 he was arrested.
Caspersen’s claims of having a compulsive gambling problem won’t comfort the people that were stolen from of course. Those who Caspersen duped included the family of a longtime girlfriend who died on 9/11, and an old college classmate.
Mr. Caspersen even took about $1 million from the family of a longtime girlfriend, Catherine F. MacRae, who died on Sept. 11, 2001, during the terrorist attack on the World Trade Center, his lawyer said on Tuesday. Together with Ms. MacRae’s family, Mr. Caspersen had created a memorial fund to benefit education programs for children from low-income families. The lawyer said the money in the scheme was not from that fund.
Mr. Caspersen has also been charged with taking advantage of a college classmate at Princeton University who worked for Mr. Bacon’s firm. The friend, James McIntyre, invested $400,000 of his own money in Mr. Caspersen’s scheme and also gave the green light for a charitable trust affiliated with Moore Capital to invest close to $25 million.
Authorities say that Caspersen had sought to defraud investors out of $150 million, up from the $95 million cited in the original complaint. The new filing stated that Caspersen used money that was raised to “make periodic interest payments to earlier investors.”
Caspersen’s scheme was to tell investors that they were investing in PE firms, and the returns could be 15% – 20% a year. Prosecutors said five fictitious investment vehicles were used to raise money in order to carry out the scheme, and even made up employees and doctored documents when questioned by investors.
An internal investigation by PJT Partners (who now own the Park Hill Group) had concluded that Caspersen took about $40 million from investors in the last two years, of which $14 million came from friends and relatives, including his own mother, Barbara Caspersen.
Appearing before Judge Jed S. Rakoff of Federal District Court on Tuesday, Caspersen pleaded not guilty to one count of securities fraud and one count of wire fraud. However as the NYT notes, there have been negotiations taking place over the past several weeks, and Caspersen is expected to enter a guilty plea at a July 7 hearing.
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There really isn’t much to add to this story. The fact that a guy who had a privileged life resorted to not only pissing away $20 million of his own inheritance, but then stealing from friends and family, including his own mother says enough. No bullshit excuse of having a gambling problem will change those facts.
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