Second Park Hill staffer ‘unwitting’ participant in alleged Caspersen scheme

  • Caspersen allegedly tricked junior employee into speaking with hedge fund exec
  • Hedge fund exec wanted to speak to Park Hill general counsel about redeeming $25 mln
  • Junior employee retains job at Park Hill

A second Park Hill Group employee played a brief and unwitting role in an alleged scheme by former Park Hill executive Andrew Caspersen to defraud investors of $95 million, according to people with knowledge of the situation.

Caspersen, who was fired by Park Hill, was arrested on March 28 and charged with one count of wire fraud and one count of securities fraud by the U.S. Attorney’s Office for the Southern District of New York. PJT Partners, Park Hill’s parent, said it was “stunned and outraged” when it learned of the alleged scheme. PJT brought the matter to the attention of the U.S. Attorney and has “cooperated fully with law enforcement,” the firm said in a statment.

The junior Park Hill employee, identified only as “Individual 4” in the U.S. Department of Justice complaint against Caspersen, is not being fired from the firm and has not faced any charges for the brief role played in the situation, according to the people, who spoke to Buyouts on condition of anonymity.

“Everything they’ve learned at this point is that Caspersen acted alone in this whole thing; this [junior employee] was an unwitting participant very briefly,” one of the people said.

Park Hill executives declined to comment. Daniel Levy, an attorney for Caspersen, did not return requests for comment. The Department of Justice declined to comment.

That the junior employee played an unwitting role is important because the Department of Justice complaint (and the Securities and Exchange Commission, which filed parallel charges) identifies only Caspersen as the perpetrator of the alleged scheme. So far, nothing suggests anyone else at Park Hill was involved.

The complaint against Caspersen accuses him of fraud by creating a fake private equity fund and taking a $25 million investment from Moore Charitable Foundation in November. Instead of making PE investments, Caspersen allegedly deposited the bulk of the money in his own brokerage account and traded options, according to the DOJ complaint. Caspersen also allegedly wired $8 million to a Park Hill bank account to cover up a previous unauthorized $8 million wire transfer intended for Park Hill that he allegedly diverted for his personal use, the complaint said.

Caspersen also allegedly unsuccessfully tried to fraudulently solicit another $20 million from the Moore Charitable Foundation, and $50 million from an unnamed private equity fund, the complaint said.

The junior Park Hill employee’s role came as the alleged scheme was beginning to unravel, the complaint said. In early March, Caspersen allegedly asked a hedge fund employee working with the Moore Charitable Foundation for an additional $20 million investment, the complaint said.

Instead, the hedge fund employee asked to redeem the foundation’s initial $25 million, the complaint said. The hedge fund employee asked to speak to Park Hill’s general counsel, but instead Caspersen allegedly directed the hedge fund employee to the junior Park Hill staffer, the complaint said.

It’s not clear whether the hedge fund employee knew to whom he was talking. The details of their conversation are not clear. The complaint said the hedge fund employee had a phone call with the junior employee and said the Moore Charitable Foundation wanted its $25 million back.

The hedge fund employee sent a follow-up email to Caspersen and the junior employee, repeating the redemption request. The junior employee responded with an email confirming receipt of the request, the complaint said.

The junior employee came forward about the conversation after Caspersen’s charges were made public and hit the media, said the people who spoke on condition of anonymity. The junior employee realized he was “Individual 4” after reading the Justice Department’s complaint, the people said.

Editor’s note: The last sentence in the seventh paragraph of this story was rewritten for clarity.

Action Item: See the news release about the complaint vs. Caspersen:

Photo: Andrew Caspersen departs after a hearing at the U.S. Federal Court in New York March 28, 2016. REUTERS/Lucas Jackson