U.S. District Judge Colleen McMahon handed down the sentence to Daniel Marino, 48, for his part in the demise of Bayou Management LLC, the Associated Press reported (See Hedge Fund Firm Charged with Fraud Files Bankruptcy ). McMahon tacked on a three-year period of supervised release at the end of Marino’s jail term .
Marino and Samuel Israel III, former Bayou CEO, pled guilty in September 2005 to conspiracy, investment adviser fraud, and other charges resulting from their scheme to inflate the value of Bayou’s funds. Israel is awaiting sentencing.
Prosecutors said that Israel and Marino
misrepresented the value of Bayou Management’s funds and
their performance to convince new clients to invest and
to persuade existing clients to keep their money with
Bayou. The two men were also charged with reporting
fictitious rates of return in weekly newsletters,
reporting inflated profits in annual statements to
investors, and creating a phony accounting firm,
Richmond-Fairfield Associates, which they claimed audited
Bayou’s annual financial statements.
“I am truly sorry,” Marino told McMahan during a court hearing, according to the news report.