Michael Mendelson entered an unexpected guilty plea at what was supposed to be a preliminary hearing relating to allegations of fraud at his now collapsed Toronto-based hedge fund, Portus Alternative Asset Management.

Apparently he is, as the judge in the case believes, a changed man and accepted a two year sentence as well as responsibility for his actions.

Mendelson will also be testifying against his former (and quite literal) partner in crime, Boaz Mason. But Mason, perhaps a less transformed individual, won't be showing up any time soon. He fled Canada for Israel to avoid prosecution.

The disintegration of Portus left about 26,000 wondering what had become of the $750 million they had placed in the care of Mendelson and Mason.

The good news is, in this case, investors expect to get back more than 90% of the funds. We'll see how that goes. More on Portus, Mendelson and Mason right here, via the National Post.

-- MDT

Labels: Boaz Mason, Fraud, hedge fund, Michael Mendelson, Portus