Banker accused of ‘shameful charade’ to bilk investors of $95 million seemed to have it all

Andrew Caspersen, the banker accused of stealing $25 million, appeared to get it all, at least in writing.

Scion of a family that built and sold a finance company for billions, Caspersen went from Princeton University to Harvard School, where students can read rare books in the Caspersen Room or study within the Caspersen Student Center. Until Monday, he was a md at PJT Partners Inc. He earned a lot more than $3 million a year, prosecutors said in court, helping private- equity funds restructure.

We wonder why would he tell the truth now, when he’s lied all along?

Now Caspersen, 39, is out of work and charged with what federal prosecutors call a brazen fraud. Based on the Manhattan U.S. attorney’s office, he invented a fake “credit facility” that promised preferred tax treatment and duped a hedge-fund manager into wiring him millions this past year, the majority of it from a charitable foundation. He gambled it away betting on stock options in just four weeks, based on the criminal complaint. In all, Caspersen is charged with scheming to defraud investors in excess of $95 million.

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Caspersen’s case raises questions regarding how PJT, an advisory firm that combined with the mergers and restructuring businesses of private-equity giant Blackstone Group LP last year, failed to notice what he was doing, and why someone in his position would allegedly operate a scam that was apt to be discovered. PJT’s stock plunged as much as 25 per cent before recovering to close down 11 per cent at $23.66.

No Assets

Caspersen didn’t offer any answers when he appeared in Manhattan federal court on Monday wearing a white polo shirt and gray slacks, together with his wife, mother and one of his brothers looking on in the back row. Defence lawyer Dan Levy, arguing against prosecutors’ request for US$20 million bail, said his money was all gone. “Losses have eviscerated any assets,” he said.

Assistant U.S. Attorney Christine Magdo disagreed. “He created fake identities and used the identities of real individuals,” she said. “He stole from their own employer and now he says he’s no assets. We wonder why would he tell the truth now, when he’s lied all along?”

Caspersen was launched from custody on the US$5 million bond. Levy declined to discuss the costs. Caspersen’s wife Christina didn’t reply to an appointment and e-mail seeking comment.

Caspersen helped Coller Capital for around ten years before relocating 2013 to fit Hill Group, a a part of Blackstone. He specialized in secondaries – stakes in hard-to- sell private-equity funds. Park Hill was spun from Blackstone in October and is now a unit of PJT Partners. PJT said inside a statement it had fired Caspersen which was “stunned and outraged” to learn of the fraud.

Irving Place

According to prosecutors, the fraud’s roots go back to July. Per month earlier, Park Hill helped private-equity firm Irving Place Capital raise US$500 million to restructure a fund from 2006, the client’s regulatory filing shows. Caspersen done that assignment, based on you aren’t understanding of the matter.

Four months later, Caspersen e-mailed the manager of an international hedge fund and offered him the opportunity to earn a temptingly high return, based on the criminal complaint. An investment, which he claimed was related to the restructuring from the Irving Place fund, “offers private equity returns (15%) but with no risk,” Caspersen said within an e-mail to another potential investor that was quoted in court documents.



No Connection

What the investor didn’t know was that the account finding the money, Irving Place III SPV LLC, was really controlled by Caspersen and had absolutely nothing to use the Irving Place firm. PJT didn’t authorize Caspersen to raise the funds, prosecutors said.

A spokesman for the Irving Place private-equity firm said hello had no knowledge of Caspersen’s scheme and was working with prosecutors.

Father’s Suicide

Caspersen’s family history has triumph and tragedy. His father, Finn M.W. Caspersen, ran the consumer-finance company Beneficial Corp. for nearly 2 decades, after their own father had overseen it for 18 years. In 1998, you purchased it , out for more than US$8 billion. He acquired estates in Florida and Rhode Island and donated towards the Peddie School in Nj, Drew University and Harvard Law, which all his four sons attended.

Then in 2009, he killed himself. Based on reports from the moment in the Ny Times and Vanity Fair, he was weakened by kidney cancer and fighting using the Irs on suspicion of evading taxes in offshore bank accounts.

At Monday’s hearing, prosecutors said Andrew Caspersen was facing mental-health issues coupled with substance-abuse problems. Responding to questions from the court, Levy said he wanted to “be circumspect” about his client’s mental health, saying, “those thoughts were relatively.” Magistrate Judge James Francis ordered Caspersen to get counseling as they awaits trial.

Six Months

Caspersen’s scheme only lasted for around 6 months. He lost most of the money in November trading short-term options on the Standard & Poor’s 500 Index, prosecutors said. Then in March, he told his investor that the opportunity had come up for the foundation to set up another $20 million. Caspersen used his family like a lure, saying these were investing $5 million. The building blocks wasn’t named in the charges.

That’s once the fraud unraveled. On March 7, Caspersen’s victim asked to speak to a professional at Coller Capital, who had been listed on a few of the fake investment documents. Instead, Caspersen allegedly generate a website name similar to Coller’s that morning, and sent his victim an e-mail that looked like it had been in the executive. Then Caspersen impersonated the Coller executive on the business call. Chris Gillick, a spokesman for Coller, declined to comment.

The ruse didn’t work. Another employee of the victim’s hedge fund spotted the discrepancy that day determined the domain had been set up. The investor confronted Caspersen, who said everything was fine and also the money could be returned after the month, based on the government.

Didn’t Bite

The following day, Caspersen attempted to get another firm to invest $50 million within the scheme. The organization didn’t bite, prosecutors said. But as recently as March 18, Caspersen was still being telling his investor that he’d send the cash by March 31.

PJT discovered his scheme about two weeks ago, according to people acquainted with the matter. It hired the law firm Paul Weiss Rifkind Wharton & Garrison to research, then alerted U.S. Attorney Preet Bharara. Caspersen was arrested in an airport on March 26.

Bharara named it a “shameful charade – creating fake e-mail addresses, setting up misleading domains, and inventing fictional financiers.”

PJT, named for former Morgan Stanley banker Paul Taubman, said within the statement that it has insurance coverage it believes would cover much of any potential liability it has. Representatives for PJT declined to comment past the statement.

Caspersen and his family own Westby Corp. in Hobe Sound, Florida, which raises cattle, grows oranges and grapefruit and controls real estate, according to state records and the firm’s website. A recording machine at Westby’s phone number says: “Westby Corporation has closed its offices. Please do not leave a message as this phone is not monitored.”

Bloomberg.com