On January 10, 2018, it was announced that the owner of two Cambridge, Massachusetts-based investment advisory firms had pleaded guilty in connection with a scheme to defraud investors. 44-year-old Yasuna J. Murakami pleaded guilty to wire fraud yesterday. The defendant is now scheduled to be sentenced on April 8, 2018. Murakami was charged and arrested in May of 2017.
Murakami served as a managing member of MC2 Capital Management LLC and MC2 Canada Capital Management LLC. Through these investment advisory firms, Murakami established and managed three hedge funds.
- MC2 Capital Partners Fund
- MC2 Capital Value Fund
- MC2 Capital Canadian Opportunities Fund
From 2011 and 2016, the defendant fraudulently diverted millions of dollars of investor funds to business and personal accounts he controlled. The money was ultimately used for lavish personal expenses, including purchasing a luxury sports car and international travel. The defendant also used new contributions to make Ponzi scheme-like payments to earlier investors.
Additionally, the defendant withheld material information about the management of the MC2 Canadian Opportunities Fund. Murakami provided investors with falsified account statements and tax documentation in hopes of convincing them that their investments were safe. The Securities and Exchange Commission also announced securities fraud charges against the defendant and his hedge fund advisory firms in May of 2017.
SEC charges were also filed against the defendant’s business partner, Avi Chiat, in relation to the scheme. In January of 2017, civil fraud charges were filed again Murakami by the Massachusetts Securities Division. At the time of sentencing, Murakami will face a maximum sentence of 20 years in prison and three years of supervised release.
Additional details can be found here.