A former hedge fund manager has been indicted by a federal jury for defrauding investors out of $8 billion and for obstructing the U.S Securities and Exchange Commission’s subsequent investigation into his activities.
The Federal Bureau of Investigation said in a statement that North Carolina-based SJK Investment Management founder Stanley J. Kowalewski, who was arrested on Wednesday, was charged with 22 counts of wire fraud, one count of conspiracy and one count of obstructing SEC’s proceeding.
Kowalewski allegedly began soliciting money from pension funds, school endowments, hospitals, non-profit foundations, and other investors in 2009. Kowalewski was also accused of fraudulently inflating monthly returns.
Investigators said that Kowalewski, who used the money to buy three homes for himself and his family, lied in his sworn testimony during an investigation the SEC initiated in 2010 to determine whether there had been violations of the federal securities laws in connection with SJK.
If convicted, Kowalewski could face centuries in prison.