NY Money Man Pleads Guilty In Royal-ties Scam
NEW YORK (AP) - A New York money manager accused of faking close ties to a Belgian royal family to bamboozle investors admitted Wednesday he cheated them out of about $7 million in a scheme his lawyer said was fueled the 2008 financial crisis.
Guy de Chimay pleaded guilty Wednesday to grand larceny, scheming to defraud and other charges, acknowledging that he lured people to put money in a bogus investment vehicle.
"I made false statements and promises. In fact, when I made these representations, I had no intention at that time of making such investment," he told a court.
De Chimay, 47, expects a three-to-nine-year prison term and an order to repay more than $6.6 million in restitution; the number differs from the amount of the theft because he has already repaid some of it, his lawyer said. De Chimay's sentencing is set for Feb. 23.
"This case is a classic example of the type of financial criminal activity that exploded in an era of selfishness," Manhattan District Attorney Cyrus R. Vance Jr. said in a statement. "(De Chimay) used his distant connection to the Chimay royal family to gain the trust of his victims - his friends - before ripping them off."
De Chimay's lawyer, Gordon Mahler, said the money manager was desperate to raise money to save his investment business, Chimay Capital Management, after suffering losses in the financial turmoil of 2008.
"Mr. de Chimay realizes that the collapse of the financial markets does not excuse his conduct, but it explains it," Mahler said. "He's always been a hardworking guy, and he's going to work hard to make whole the half-dozen or so victims of this sad episode."
The Manhattan criminal case and civil fraud charges filed by the Securities and Exchange Commission accused de Chimay of using his clients' money to pay for homes in the Hamptons, his divorce lawyers' bills, car payments and other personal expenses. Authorities have said he also paid some investors off with others' money.
De Chimay has agreed to resolve the SEC case by agreeing to refrain from violating securities laws; a federal judge formalized the agreement Monday, with the amount of any penalties yet to be determined, court records show.
The SEC's court filings said Chimay claimed to be running the U.S. investment arm of the Chimay family, a line of Belgian royalty. More than 20 generations have inhabited the Chimay family's castle in Chimay, the same town where Trappist monks brew the beer of the same name.
The money manager embroidered on a distant link to the family, claiming he had access to more than $200 million in "family money," plus $40 million of his own, the district attorney's office said. He told clients he was a prince's cousin, according to the SEC.
Brandishing his phony pedigree and using bogus bank statements to bolster his concocted claims about his assets, Chimay persuaded a handful of his own relatives, friends and others to invest in or lend money to a so-called "bridge loan facility," prosecutors said. It promised to return 12 percent a year by making short-term loans to carefully vetted companies, including real estate projects, according to prosecutors and the SEC.
Chimay, a U.S. and Canadian citizen, was arrested June 11 in Wrightsville Beach, N.C.