Charlotte Man Pleads Guilty to Securities Fraud in Ponzi Scheme

by ParkmanLawFirm on May 24, 2013

Stephen Maiden, 40, pleaded guilty on Thursday to carrying out a Ponzi scheme that caused a total loss to victims of at least $8.9 million.  The United States Attorney’s Office in Charlotte says Maiden conducted this scheme through his Charlotte based hedge fund:  Maiden Capital Opportunity Fund.

Maiden formed his hedge fun in October 2006 and touted his past educational and professional experience to attract investors from Charlotte and other areas.  His experience included time spent as an investment banker with Chase Securities, Inc. and time at Mangan & McColl Partners as an investment analyst.

According to court documents, Maiden routinely transmitted bogus account statements to victims and to Maiden Capital’s fund administrator beginning as early as February 2009. These statements allowed Maiden to falsely report favorable returns both monthly and from the fund’s inception.  In June 2011, Maiden transmitted a fraudulent account statement which reported net monthly returns of 1.3% and a 56 month net return of 81.3%.  However, these estimates were completely falsified and by February 2009, Maiden had lost the majority of the fund’s assets in failed investments.

The keep the Ponzi scheme going, Maiden allegedly used money from new investors to satisfy withdrawal requests made by other fund investors.  He falsely characterized these transactions as payments from Maiden Capital’s successful operations.

Stephen Maiden pleaded guilty to one count of securities fraud and has been released on bond.  He faces a maximum of 20 years in prison and a $250,000 fine.  Maiden also agreed to pay an amount of restitution which will be decided at his sentencing.

If you find yourself facing federal fraud charges, it is important to find an experienced white collar criminal attorney to represent you.  The attorneys of Parkman & White, LLC have a history of success in the court room and are ready to represent clients nationwide.


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