Hedge fund executives were charged today in a $1 billion fraud case linked to a deadly oil rig explosion in the Gulf of Mexico.
As The Associated Press reports, officials with Platinum Partners were to appear in a Brooklyn, New York, federal court to face charges that they lied to investors about the performance of a fund that ran into trouble when one of its assets, the Black Elk oil exploration company, had a rig explode in 2012 near the Louisiana coast.
Mark Nordlicht, Platinum Partners’ chief investment officer, was charged with securities fraud conspiracy and other offenses. Six other people, including the former chief financial officer at Black Elk, were named in an indictment that alleges a scheme beginning in 2012.
The indictment accuses the defendants of lying to investors about the value of funds they were managing. The evidence includes emails between Nordlicht and others that “illustrated their knowledge and awareness of the fraudulent scheme perpetrated on Platinum’s investors and prospective investors,” the indictment says.
There was no immediate response to a message seeking comment from Nordlicht’s attorney. Platinum representatives did not immediately respond to a request for comment.
As the New York City-based hedge fund began to go under in December 2015, Nordlicht wrote that he was thinking about using $7.5 million from a second mortgage on his home to try to keep it afloat, the papers say. He also was considering fleeing the country, they say.
“Am on my way to JFK with the kids for their 6 p.m. flight to Israel,” he wrote in one email, according to the indictment. “My wife is literally making me get on Israel flight if we don’t connect and agree what we are doing.”
One of his cohorts responded: “You should get on the flight if there is no bridge (loan), probably even if there is.”