Mini Madoff in Federal Court
Manhattan has Bernie Madoff. We have Michael Regan.
The 65−year−old investment manager came to Brooklyn Federal Court last week to plead guilty to felony securities fraud in connection with yet another Ponzi scheme.
Federal prosecutors charge that Regan, a resident of Massachusetts, had swindled investors in his River Stream Fund of $8.9 million.
When sentenced, Regan could face 20 years in prison and a fine of $5 million. He will also have to pay restitution to the 70 investors −− some Brooklynites −− he swindled.
Regan, the sole manager of the River Stream Fund, claimed that before the fund’s April 2008 collapse, he had more than $18 million under management.
Investigators learned, however, that as far back as 2001 Regan gave investors fraudulent account statements showing that the fund had annual returns of approximately 20 percent. River Stream actually lost money or achieved minimal returns from 2001 through April 2008. Regan paid more than $9 million in redemption requests to investors by using new investor funds and took more than $2.5 million in performance fees from River Stream even though he never achieved the minimum 12 percent annual return required for him to be entitled to the fees.
By the time River Stream collapsed, it had only $101,600 under management instead of the $18 million Regan reported to his investors. The total cumulative investor losses exceed $8.9 million, officials allege.
“Investment advisors who breach their clients’ trust and commit criminal acts in order to line their own pockets should be on notice that we will aggressively investigate and prosecute them,” stated United States Attorney Campbell.
An injury lawsuit against the Brooklyn Jewish Children’s Museum will go forward now that the judge had thrown out a motion to dismiss by the museum lawyers.
Plaintiff Charles Mangano claimed that he was following someone out of the first−floor gift shop to the Eastern Parkway museum back in March, 2007 when he “sustained serious and permanent injury when his left thumb got caught between the door and the door frame.”
Mangano said he was installing security cameras at the museum when the accident took place and claimed that a defect in the door caused it to close “at an excessive rate of speed.”
He needed surgery to repair his thumb nail, he said.
Armed with engineers and witnesses, Mangano set forth proving his point to Judge Yvonne Lewis. Attorneys for the Brooklyn Children’s Museum claimed that Mangano could not prove that the door was defective and that they knew of the defect before his injury. As they built their defense, they even turned to the Jewish Children Museum’s chief of operations who testified that the door was installed properly four years ago and that there haven’t been any changes or alterations to the door since.
Judge Miller said that while attorneys for the Jewish Children’s Museum “highlighted ample grounds for cross−examination” their allegations “did not contradict the plaintiff’s expert testimony.”
©2009 Community News Group
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