By Brendan Pierson
NEW YORK (Reuters) - Federal prosecutors on Friday charged a New York man with bilking investors out of $5.3 million by misrepresenting himself as a successful fund manager linked to the family behind the former Genovese drug store chain
In a criminal complaint unsealed in Manhattan federal court, prosecutors accused Nicholas Genovese of defrauding investors in his purported hedge fund Willow Creek Investments LP since at least 2015. The U.S. Securities and Exchange Commission also announced a related civil case.
A lawyer for Genovese could not immediately be identified. Nicholas Biase, a spokesman for federal prosecutors in Manhattan, said on Friday afternoon that Genovese was in custody and would appear in court later in the day.
According to the SEC, Genovese falsely claimed that he managed $4 billion of assets for the family behind Genovese Drug Stores, a drug store chain that once operated in the New York City area. He also falsely claimed that his fund achieved annual returns of 30 percent to 40 percent, when in fact it lost money, the SEC said.
Prosecutors said in the criminal complaint that Genovese falsely claimed to have a master's degree in business administration from Dartmouth College and to have worked at Goldman Sachs and Bear Stearns.
Authorities said Genovese used investor funds to trade in his personal brokerage account, losing more than $8 million between 2015 and 2017. The SEC said $263,000 of the money went to fund Genovese's lifestyle, including being chauffeured in a Bentley.
Genovese's fraud was "ongoing" at the time the charges were filed, the SEC said.
(Reporting By Brendan Pierson in New York; Editing by Tom Brown)