Jeffrey A. Martinovich, Money Laundering, Virginia 2013

NEWPORT NEWS, Va. – Jeffrey A. Martinovich, 50, formerly of Newport News, pleaded guilty today to charges of money laundering.

According to court documents, Martinovich was the head of MICG, a broker-dealer located in Newport News. In 2013, Martinovich was convicted after a jury trial of federal charges related to his fraudulent inflation of assets in the Venture fund – a hedge fund he managed and administered.

After these charges were brought, Martinovich engaged in a scheme to use the assets of a different hedge fund (the Partners fund) he managed to pay for his criminal legal defense, including payments to expert witnesses, a jury selection consultant, and other litigation expenses. Martinovich falsely represented to his attorney, and took other steps to conceal, the origin of these funds used for his defense.

Further, Martinovich declined to make distributions to investors in the Partners fund, choosing instead to use the balance of the fund to pay for expenses related to his offense.

According to court documents, following the defendant’s convictions on May 6, 2013, it came to light that the defendant had wrongfully diverted over $700,000 from the Partners Fund and instructed an employee to conceal his theft through false bookkeeping entries.

On September 30, 2013, Martinovich was sentenced to 140 months in prison for his fraudulent manipulation of the assets in the Venture Fund. His appeal of his convictions was denied by the U.S. Court of Appeals for the Fourth Circuit, and the case has been remanded for resentencing.

Martinovich was indicted on charges stemming from his use of the Partners fund monies by a federal grand jury on July 15, 2015. Martinovich faces a maximum penalty of 20 years in prison, sentenced on September 29. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Thomas Jankowski, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (ISR-CI), made the announcement after the plea was accepted by U.S. District Judge Arenda L. Wright Allen. Assistant U.S. Attorneys Brian J. Samuels and V. Kathleen Dougherty are prosecuting the case.

Related Federal Cases