A scenario...

You get some junk mail that offers above-market investment returns and an invite to a steak dinner. You figure, why not. After all, you like steak. But if the guy you dined with was John H. Williams, odds are he conned you into giving him your money, which instead of multiplying as promised he might as well have set a'fire right there at the table.

You see Williams, your host, was funneling your funds to Stephen Chesnowitz, a Canadian hedge fund trader with assets in the Cayman Islands and Canada. Now, actually disclosing that you have no idea how to run or manage a successful investment fund would sort of...impede the cashflow situation. So, rather than inform investors when deals went sour, these guys simply followed the tried and true falsify your financials model while maintaining rich salaries for themselves.

All told, the pair bilked about $9 million out of 150 or so unwitting investors. Williams is facing fraud charges in Maryland, while Chesnowitz is so far sitting pretty north of the border. Maryland is currently reviewing William's financial records, trying to determine where the money when and if any has been squirreled away that might be recoverable for investors.

Further details at The Washington Post.

-- MDT

Labels: Fraud, hedge fund, John H. Williams, LaJohn Capital, Stephen Chesnowitz