Three city workers sentenced in an $8.45m hedge and wealth fund fraud [20 February 2023]

Three fund managers have been sentenced today (20 February 2023) for a large-scale fraud which amounted to losses of $8.45 million which were meant for the people of Libya at Southwark Crown Court.

• Frederic Marino, 56, was found guilty of fraud by abuse of a position of trust and sentenced to 7 years and six months imprisonment.
• Yoshika Ohmura, 47, was also found guilty of fraud by abuse of a position of trust and sentenced to 3 years and six months.
• Aurelien Bessot, 47, was guilty of fraud by abuse of a position of trust and sentenced to 15 months imprisonment suspended for two years.

Frederic Marino, former chief executive of FM Capital Partners (FMCP), and Yoshiki Ohmura, his associate and former senior executive at Bank Julius Baer, have been convicted of fraud in the UK High Court.

The court found that Marino and Ohmura acted dishonestly when receiving secret commissions and paying bribes of over US$25m in connection with a portfolio of assets owned by the Libya Africa Investment Portfolio (LAP), a Libyan sovereign wealth fund.

At the time, FMCP was managing LAP's assets, but Marino defrauded FMCP by conspiring with Ohmura to divert funds away to offshore companies and accounts (in Monaco, Cayman, Seychelles and Dubai) they controlled personally over four years starting in 2009, according to the court. The court found that Marino 'papered up payments via contracts with Ohmura and their respective companies. 'They used the stolen money to fund lavish lifestyles,' stated the ruling.

Marino was involved in derivatives,

• Initially at Rabobank and later at Merrill Lynch, Bear Stearns and at JP Morgan,
• Following the Bear Stearns merger with JP Morgan and was responsible for the marketing and sales of structured notes.

Mr Ohmura has been a business associate of Mr Marino since around 2004.

• Between 2004 and August 2009, Mr Ohmura was the Global Head of the structured investments group at JB.
• He was the founder and General Director of one of its subsidiaries, GAM, which was incorporated in Guernsey.
• It was later (post July 2009) called Baer Alternative Solutions Limited ("BASL").
• His expertise was in the design and technical structuring side of the structured products business

The CPS team and National Crime Agency investigation proved these three defendants worked together to defraud a hedge fund and sovereign wealth fund which belonged to the Libyan people.

Frederic Marino and Aurelien Bessot established a company called FMCP,

• Which was responsible for investing the funds of a sovereign wealth fund established by the Libyan government.

Instead of optimising the investments,

• Marino and Bessot, with the help of Yoshiki Ohmura, placed investments to maximise their rewards to the detriment of the fund. The direct losses to the fund are approximately $8.45 million.

The Libyan Investment Authority

• Was established in 2006 by the Libyan government to manage the Libyan Sovereign Wealth Fund to protect and develop the value of Libya's oil revenue reserves and diversify the sources of national income away from oil.

Marino set up a London hedge fund operation where in partnership with Bessot he was collecting undeclared finder fees for various investments made on behalf of the Libyan wealth fund.

The money from these fraudulent actions was laundered through a series of shell companies set up by these two defendants. They were supported in these criminal activities by Ohmura in laundering these funds.

Andrew West of the CPS said:

• "These three fraudsters were calculating and opportunistic in committing offences that left the people of Libya out of pocket by approximately $8.45 million for purely selfish and greedy purposes to fund their lavish lifestyles.
• "They showed a complete disregard for the important position they held to make investments work for their clients who were looking to diversify away from solely oil revenues.
• "We would like to thank the hard work and dedication of the National Crime Agency in their diligent and determined investigation."

The CPS is committed to working with criminal justice partners to combat large-scale financial fraud.

Notes to editors

1. Andrew West is a Specialist Prosecutor for the CPS
   • Serious Economic Organised and International Directorate (SEOCID)
2. SEOCID was launched on 1 April 2022 and is the CPS's response to the changing nature of crime by bringing together specialists in organised and economic crime as the lines in this criminality is being blurred even more
3. Frederic Marino (DOB: 16/06/1966) was found guilty of fraud by abuse of position of trust and was sentenced to 7 years and six months imprisonment. Disqualified from acting as a director for 12 years
4. Yoshika Ohmura (DOB: 01/03/1975) was also found guilty of fraud by abuse of position of trust and was sentenced to three years and six months imprisonment. Disqualified from acting as a director for 5 years
5. Aurelien Bessot (DOB: 07/07/1975) pleaded guilty of one count of fraud by abuse of position of trust and was sentenced to 15 months suspended to two years. Disqualified from acting as a director for 5 years

SOURCES

https://www.cps.gov.uk/cps/news/update-three-city-workers-sentenced-845m-hedge-and-wealth-fund-fraud

https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Comm/2018/1768.html&query=(Frederic)+AND+(Marino)

https://www.structuredretailproducts.com/news/details/24890