- Caspersen allegedly attempted to raise $95 mln for shell vehicle
- Allegredly tried to tie vehicle to Irving Place restructuring
- Caspersen fired for cause, Park Hill said
Andrew Caspersen of Park Hill Group was arrested and charged with one count of wire fraud and one count of securities fraud on Monday.
The U.S. Attorney’s Office for the Southern District of New York filed criminal charges. Caspersen has yet to enter a plea, according to reports. The SEC is pursuing a civil case against Caspersen.
Both criminal charges carry a maximum penalty of 20 years in prison. His attorney could not be reached for comment.
No firms have been charged with misconduct.
According to a copy of the charges, Caspersen used a shell entity he dubbed Irving Place III SPV in an effort to raise $95 million from investors. He claimed the vehicle was secured by the $900 million of assets held by Irving Place Capital Partners III SPV.
Park Hill Group worked on the restructuring of Irving Place Capital’s third flagship fund last year. Buyouts reported Irving Place’s restructuring in July, roughly two months prior to Park Hill’s spin-out from Blackstone Group in October. Caspersen’s former employer, Coller Capital, invested up to $500 million in the Irving Place deal, Buyouts reported.
Caspersen used the shell entity to raise $25 million from a charitable foundation connected to a hedge fund, according to the charges. He diverted $17.6 million to a personal brokerage account, which was soon depleted as a result of aggressive options trading, according to the U.S. Attorney’s office. Another $8 million was used to cover up an unauthorized wire transfer from a Park Hill account.
A second limited partner declined to invest $50 million in the vehicle and, when Caspersen attempted to raise another $20 million from the charitable organization in early March, the scheme quickly unraveled, according to the charges. The charitable organization’s $25 million investment has not been returned, the U.S. Attorney’s office said.
Park Hill fired Caspersen for cause. In a statement, Park Hill’s parent firm, PJT Partners, wrote it was “stunned and outraged to learn of the fraudulent circumvention and violation of the Firm’s compliance policies and ethical standards.”
“Immediately upon learning of facts that suggested improper behavior, we commenced an internal investigation led by outside counsel, Paul, Weiss, and very quickly thereafter, brought the matter to the attention of the U.S. Attorney’s Office in Manhattan. Since that time we have cooperated fully with law enforcement, and we will continue to do so,” the statment said.
The review and investigation by the authorities remains ongoing. PJT declined to provide additional information.
In a statement, Blackstone wrote: “We are appalled by the fraudulent actions of this former Park Hill employee. PJT and the authorities will have our full cooperation and assistance as they pursue this matter.”
In a statement, Coller wrote: “At this stage, the firm has no reason to believe there was any wrongdoing by Mr. Caspersen during his time of employment with Coller. No accusations have been made against Coller Capital or any current member of the firm’s staff. Indeed, Coller’s first knowledge of the matters under investigation by the US Attorney’s Office was in late March 2016.”
Irving Place did not respond a request for comment.
Photo: Andrew Caspersen departs after a hearing at the U.S. Federal Court in New York March 28, 2016. REUTERS/Lucas Jackson
(Update: The story was updated to include a statement from Coller Capital.)