Prosecutors Say Boston Hedge Fund's Manager Defrauded Investors
BOSTON (Reuters) - Federal prosecutors on Wednesday accused the manager of a Boston-based hedge fund of defrauding investors out of millions of dollars, nearly two months after state regulators charged him with engaging in a Ponzi-like scheme.
According to a criminal complaint filed in Boston federal court, Raymond Montoya, who operated RMA Strategic Opportunity Fund LLC, misused millions of dollars to pay for luxury vehicles and his son's home mortgage and to repay earlier investors.
Massachusetts Secretary of State William Galvin accused Montoya in June of engaging in an "egregious fraud" and brought an administrative complaint against him.
Galvin's office said at the time it was also making federal authorities aware of the case. Four days after Galvin brought charges, Montoya met with law enforcement and admitted to defrauding RMA investors, the criminal complaint said.
His lawyer, Christopher Bruno, said the 69-year-old resident of Allston, Massachusetts was cooperating with authorities and surrendered to face the criminal charges on Wednesday morning. Bruno said Montoya was also in plea talks.
"His efforts are focused on preserving assets for ultimate return to investors," Bruno said in a statement.
During a court hearing, Assistant U.S. Attorney Neil Gallagher said Montoya had already agreed to freeze accounts he controlled holding $6 million to $8 million in assets and forfeit 10 vehicles including three Ferraris and two Porsches.