Hedge fund fraudster gets 20 years in jail

Daniel Marino, the former finance chief of the bankrupt hedge-fund firm Bayou Group LLC, was sentenced to 20 years in prison for defrauding investors of more than $400 million.

The judge cited the size and length of the eight-year fraud, and Marino's role as its "linchpin" in setting the sentence. Marino, 48, who had sought leniency due to his cooperation with prosecutors, was ordered imprisoned immediately. He was handcuffed by marshals in the well of the courtroom and led away.

"You are as much a career criminal as any mobster or any drug kingpin," US District Judge Colleen McMahon said in Manhattan federal court, adding he may have gotten a 50-year term. "There is simply no alternative but to punish you for your life of crime."

At least 16 corporate executives have been sentenced to 20 years or more in prison since 2003, according to court records. They include former WorldCom Inc Chairman Bernard Ebbers, who received 25 years for fraud.

Bayou, based in Stamford, Connecticut, was among the biggest hedge-fund firms to come under federal scrutiny for missing money. It filed for bankruptcy in May 2006, prompting lawsuits that claimed it operated a "Ponzi scheme" that paid off old investors with money from new ones.

Marino apologized, saying he was "truly sorry".

Individuals who cooperate typically receive greatly reduced sentences. The judge said she didn't give Marino credit for cooperating because his help wasn't central to solving the case. She said the amount of the fraud "boggles the mind".

The court will order Marino to pay restitution in the "nine figures", McMahon said, adding she will set the amount within 90 days. Marino's lawyer, Andrew Bowman, said he will appeal the sentence.

Bowman asked for leniency, citing his client's recurring bouts of cancer, hearing loss, depression and attempted suicide.

In refusing his bid for leniency, she told Marino that his "personal difficulties" don't warrant a shorter sentence.

"You are a sad individual - you were good at doing the worst," she told him. "And for this, you have to pay."

Agencies

(China Daily 01/31/2008 page16)