California Private Debt Fund Manager Charged with Fraud

A Los Angeles money manager, Brendan Ross has been charged for falsely claiming that he invested clients’ money successfully and through it, accumulating millions of dollars in illegal fees.

According to the U.S. attorney Nicola Hanna, the 47-year-old manager was arrested on Tuesday and charged with ten charges of wire fraud.

Ross, at a time, handled approximately $1 billion of assets at Direct Lending Investments LLC.

The U.S. Securities and Exchange Commission filed the civil charges.

The SEC had sued Direct Lending Investments in March 2019, and the firm was later put into receivership.

On July 10, the receiver stated that the investors might recover 27% to 34% of the $789.6 million of assets on the firm’s records as of March 31, 2019.

California Private Debt Fund Manager Charged with Fraud
California Private Debt Fund Manager Charged with Fraud

The U.S. prosecutors said that Ross invested his funds in a company that gave loans to small businesses and retailers, and the funds would make profits only when those small businesses made on-time payments.

However, the indictment reads that Ross incorrectly altered monthly reports to give an idea that borrowers who were behind paying debts were current, and hid how payments came from fee deductions from the borrowers’ lender.

Prosecutors claim that this enabled Ross to increase his funds’ value by more than $300 million over four years. He also collected higher performance and management fees over this illusion.

Officials stated that Ross’ charges go back to roughly 2014 and have continued ever since till early 2019.

Ishita
Hey there! This is Ishita. A keen follower of everything that is politics, entertainment, and trending. An avid reader with an eternal love for writing, literature, cafés, and a latte. Procrastinator by day, binge-watcher by night. Do check out my write-ups.

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