FBI grills Karl White in investigation of alleged $25M Ponzi scheme

big rattler
0
The Federal Bureau of Investigation recently had a long talk with Karl E. White following allegations that he took part in what’s being described as a possible Ponzi scheme.

Here’s how the Boston Globe summarized the events that led the FBI to seek answers from White:
"Nine months after Karl E. White left his job as chief of the [Massachusetts Bay Transportation Authority] pension fund to join a New York hedge fund, he visited his former colleagues in Boston to pitch them on an investment idea. 
"White, in his new job as chief investment officer of Fletcher Asset Management, told the authority’s pension board members in 2007 that he had devised an investment fund just for them, and that it was relatively low risk. They gave their prominent former leader $25 million to invest. 
Today, that money is gone — a fact the MBTA has not previously disclosed — and a series of Fletcher hedge funds are bankrupt."
“In many ways, the fraud here has many of the characteristics of a Ponzi scheme, where, absent new investor money coming in, the overall structure would collapse,’’ wrote Richard Davis, a court-appointed bankruptcy trustee.

Gov. Deval Patrick (D-Mass) said the money’s disappearance is “troubling.” The Massachusetts attorney general’s office, U.S. Securities and Exchange Commission, and FBI are all investigating.

The Boston Globe reported that White claims he doesn’t know what happened to the funds that the MBTA invested even though he held the title of “chief investment officer” with Fletcher.

According to the newspaper, “White now works at a new financial firm he started. He faces tens of thousands of dollars in federal tax liens on his Beacon Hill home.”

White has served as a member of the FAMU Board of Trustees since 2007.
Tags

Post a Comment

0Comments

Post a Comment (0)

#buttons=(Accept !) #days=(20)

Our website uses cookies to enhance your experience. Check Now
Accept !