Mark Nordlicht, Platinum Partners Founder, Indicted in $1B Fraud

BROOKLYN, N.Y. — A federal indictment unsealed this morning exposes a $1 billion web of lies spun by the leadership of Platinum Partners, a once-celebrated hedge fund now accused of operating as a full-blown Ponzi scheme. At the center of the storm is Mark Nordlicht, the firm’s founder and Chief Investment Officer, who along with David Levy, Uri Landesman, Joseph SanFilippo, and Joseph Mann, faces charges of securities fraud, investment adviser fraud, and wire fraud conspiracy for systematically defrauding investors.

The indictment alleges Nordlicht and his top executives propped up the illusion of success by grossly overvaluing Platinum’s largest assets, concealing severe cash flow problems, and selectively paying redemptions to favored investors while leaving others in the dark. Between 2012 and 2016, Platinum reported annual average returns of more than 17 percent—returns built not on performance, but on fiction. The fraud allowed the firm to collect over $100 million in fees from unsuspecting investors.

In a second, parallel scheme, Nordlicht, Levy, Daniel Small, and Jeffrey Shulse are accused of defrauding independent bondholders of Black Elk Energy Offshore Operations, LLC. Prosecutors say they issued a fraudulent offering document that falsely claimed Platinum controlled only $18 million in bonds—when in reality, the firm held over $98 million. More than $95 million in proceeds were diverted to Platinum, further fueling the house of cards.

Robert L. Capers, U.S. Attorney for the Eastern District of New York, called the alleged fraud one of the most brazen in recent memory. “Platinum Partners purported to be a standard bearer in the hedge fund industry. In reality, their returns were the result of lies, deception, and a Ponzi-like shell game,” Capers stated. “They used new investor money and loans to pay off old investors—classic hallmarks of financial fraud.”

All seven defendants—Mark Nordlicht, David Levy, Uri Landesman, Joseph SanFilippo, Joseph Mann, Daniel Small, and Jeffrey Shulse—are scheduled for arraignment before U.S. Magistrate Judge Lois Bloom in Brooklyn. Shulse will also appear in Houston, Texas, for removal proceedings to the Eastern District of New York. The FBI and U.S. Postal Inspection Service conducted a sweeping investigation, aided by the Securities and Exchange Commission’s New York Regional Office.

“This case shows how several members of this firm allegedly manipulated and lied to investors about the health of their investments, then plotted ways to cover up their actions,” said FBI Assistant Director-in-Charge William F. Sweeney, Jr. “We need people to call us when they see things that don’t add up.” The takedown marks a major blow to a firm that once styled itself as a Wall Street titan—but now stands exposed as a vehicle for financial deception on a massive scale.