British financial advisor Arthur Vann was sentenced August 8 to four years in prison in the U.S. for swindling 14 investors out of $3.2 million via a Cayman Islands hedge fund whose directors included Sandy Schwab, son of California-based billionaire discount brokerage pioneer Charles Schwab.
Arthur James Vann defrauded victims using Cayman Development Fund Ltd., of which he was an investment advisor.
In a motion of leniency that Vann's attorney, Public Defender Daniel C. Leonardi, filed with the Court seven days before sentencing, it was stated that Vann had spent much of his career working in the “insurance and financial industry” in the Caribbean, primarily Barbados.
He further explained that Vann was ‘invited' to manage the fund by “an acquaintance of his from Grand Cayman”, who was described in the motion as “a lawyer and the son of a well-known pastor in the Cayman Islands”, he added.
Vann, 65, pleaded guilty in a federal courthouse in Columbia to conspiracy/investor fraud in mid November 2016, according to a news release provided by acting U.S. Attorney Beth Drake in Columbia.
The maximum penalty for conspiracy is imprisonment for five years and/or a fine of $250,000.Evidence in the case, presented during a plea hearing, showed Vann had an interest in various offshore bank accounts and companies, primarily located in the Caribbean, the release said.
Prosecutors said Vann, a financial adviser, diverted some of the money into accounts he controlled and spent the money for his own benefit. When confronted by investors, Vann sent them fake statements purporting to reflect the investments made.
The total amount of loss was $1.4 million. The case was invested by the FBI.
Assistant U.S. Attorney Winston David Holliday Jr., of Columbia, prosecuted the case.
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