Hedge fund manager James Nathan Fry was sentenced Wednesday to more than 17 years in prison for misleading clients about their investments with convicted Minnesota businessman Tom Petters.
Minnesota news outlet Star Tribune reported that Fry was found guilty in June of 12 counts of fraud and making false statements to the Securities and Exchange Commission. The article said that Fry maintains that he was unaware Petters was involved in any fraudulent activity.
Petters’ $3.65 billion Ponzi scheme, which got him a 50-year prison sentence, was taking investor money that was supposed to be placed in funds investing in asset-backed paper, the assets being large-ticket appliances. But the transactions and the paper turned out to be fictitious. Fry’s investors lost $120 million when the Ponzi scheme collapsed in 2008.
Fry’s attorneys asked for a prison sentence of less than six years, however U.S. District Judge Richard Kyle said that “a substantial sentence [was] required.”