Fund manager John Paulson has had a rough year. His hedge funds’ losses were in the high double digits. His Advantage Plus fund was down almost 48 percent through November and his other funds didn’t fare much better – his Advantage Fund was down roughly 32 percent through the first eleven months of the year, his Credit Opportunities fund was down over 18 percent. Now, t seems things have gotten a little bit worse.
“The New York-based hedge fund giant is among the victims of an alleged fraud scheme that used stolen financial information to steal more than $2 million, New York City,” reports FINAlternatives. The fraud ring was reportedly made up of around 55 people.
One of the alleged leaders of the ring, Tracey Nelson, was arraigned on Friday. Nelson is a former UJA-Federation check processor. Investigators found copies of contributor checks in her home safe.
“Nelson and her fellow alleged fraudsters worked with three JPMorgan Chase bank tellers to smooth their scam.” According to FINAlternatives, “Those bankers, who are no longer with Chase, accessed account information and ignored fraudulent transactions, including phone and wire transfers and credit-card applications.” Members of the fraud ring used the stolen money and the bogus credit cards to buy expensive items, which were then, for the most part, resold.
Chase has reportedly reimbursed the scam’s victims which in addition to Paulson include billionaire Ira Rennert as well as several charities, including UJA and the Starr Foundation.