Stephen Colangelo Jr., Securities Fraud, New York 2013

Grimy Times has learned that Stephen Colangelo Jr., a 46-year-old political consultant, has been indicted for securities fraud in connection with two separate schemes that defrauded investors out of more than $2.7 million.

According to a statement from Manhattan U.S. Attorney Preet Bharara, Colangelo’s first scheme involved a hedge fund he controlled called the Brickell Fund, LLC, and his second scheme involved three companies he created and controlled called ‘Hedge Community,’ ‘Start A Hedge Fund,’ and ‘Under the Radar SEO.’

Colangelo misled investors in the course of both of these schemes by making numerous misrepresentations, which included issuing fraudulent performance statements, private placement memoranda, and other business documents.

‘Investors deserve fair and honest services from their money managers,’ Bharara said. ‘Stephen Colangelo, Jr. and others like him who fraudulently pocket investor money undermine confidence in the markets.’

Colangelo pleaded guilty to two counts of securities fraud and two counts of wire fraud. The securities fraud and wire fraud charges each carry a maximum term of 20 years in prison.

The sentencing before U.S. District Judge Robert W. Sweet is scheduled for April 3, 2014 at 4:30 p.m.

Bharara praised the investigative work of the Federal Bureau of Investigation and thanked the Securities and Exchange Commission for its assistance in the case.

The case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group.

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