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Varghese & Accociates, P.C.

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CBS This Morning: Guilty parent in college scam caught saying he was “not worried about the moral issue”

https://www.cbsnews.com/news/college-admission-scam-parent-gordon-caplan-allegedly-said-hes-not-worried-about-the-moral-issue/

For the first time, a parent who pleaded guilty in the college admissions scandal has spoken publicly about his wrongdoing. High-profile attorney Gordon Caplan expressed his remorse outside Boston federal court Tuesday after admitting to a judge that he paid $75,000 to rig his daughter’s ACT.

“I’m really sorry to my daughter, who I love more than anything in the world, knew nothing about this,” Caplan said. “I’m also sorry to all the other kids out there who are in the admissions process.”

Court papers show the FBI repeatedly caught Caplan on wiretaps discussing the scheme with mastermind Rick Singer. In one conversation, the high-profile Manhattan attorney told Singer: “To be honest I’m not worried about the moral issue here. I’m worried about the – if she’s caught doing that, you know, she’s finished.”

Of the 33 parents charged in the college admissions scheme, 19 plan to fight the charges and 14 have agreed to plead guilty. They hope coming clean now will mean a lighter sentence later.

Napa Valley winegrower Agustin Huneeus Jr., one of the parents who pleaded guilty, did not speak to reporters as he left court. The vineyard owner pleaded guilty to paying Singer $300,000 to boost his daughter’s SAT score and pass her off as a water polo recruit to get her into USC. A source close to the prosecution told CBS News she is one of several children who was sent a letter by prosecutors naming them as possible targets of the investigation.

In a written statement, Huneeus apologized “to students who work hard to get into college on their own merit.” He added the “plea was an important step in my effort to take responsibility and accept the consequences for acts that I deeply regret.”

Those planning on fighting the charges include actress Lori Loughlin and her husband Mossimo Giannulli, who are now working on their defense.

Criminal defense attorney Vinoo Varghese says one area of interest will be hearing wiretapped conversations in court.

“If I’m the representative or the attorney for one of these parents, I again want to check what they have against my sole client and then I want to hear what this person has to say and, look, two people can hear the same thing and come to a different conclusion,” Varghese said.

Gordon Caplan and Agustin Hunneus will be sentenced this fall. There are still 50 to 75 more cases related to the scandal that the government is working on according to a source close to the prosecution.

Aberon Capital Boss Denies $20M Hedge Fund Racket

By Stewart Bishop, Law360

https://www.law360.com/articles/1129350/aberon-capital-boss-denies-20m-hedge-fund-racket

Law360, New York (February 14, 2019, 6:00 PM EST) — Aberon Capital Management principal Niket Jain on Thursday denied criminal charges brought over an alleged $20 million scheme to con investors in the Cayman Islands hedge fund.

Jain was arraigned before U.S. District Judge P. Kevin Castel in Manhattan, where he pled not guilty to securities fraud, wire fraud, conspiracy and obstruction of justice.

Prosecutors say from about 2010 to 2014, Jain and another managing member of Aberon raised around $20 million from investors and falsely claimed the fund was chalking up capital gains, when it was actually hemorrhaging cash.

For example, the indictment, which does not name the fund, says an unnamed investor was falsely informed of an $18 million account balance in 2011, when that investor’s balance had been in the range of $7 million around that time.

Jain also doctored financial data that was supplied to Aberon’s auditor, and cooked up falsely inflated net asset valuation statements, according to the government. Prosecutors further claim that Jain lied to the U.S. Securities and Exchange Commission at a January 2018 sit-down at which he was asked about false documents.

An attorney for Jain, Vinoo P. Varghese, told Law360 after the arraignment that Jain has led a law abiding life.

“He’s looking forward to clearing his name,” Varghese said.

Jain was arrested Jan. 29, and ordered released on a $300,000 bond, secured by $10,000 in cash or property. He’s due back in court on April 17.

The indictment doesn’t name Jain’s partner at Aberon, but related proceedings indicate it is Aberon co-owner Joseph Krigsfeld. Jain sued Krigsfeld in state court last year, saying it was Krigsfeld that was cooking the books and lying to investors. Krigsfeld is not charged in the criminal case against Jain.

In the state court action, Jain paints himself as a victim of a crooked partner who “appeared to have all the trappings of a well-connected Russian oligarch” and convinced Jain to form the fund in 2009.

Jain claims he put his own life savings into Aberon only to see them lost by Krigsfeld’s trading. As of October 2012, under Krigsfeld’s control, the Aberon funds had lost over $29 million and had assets under management of less than $500,000, according to the suit.

Aberon and Krigsfeld were also the subjects of an SEC enforcement action, which resulted in a May 2018 cease-and-desist order. According to that order, Aberon was censured, while Krigsfeld was hit with a $160,000 civil penalty and was barred from investment advisory activities.

Jain is represented by Vinoo P. Varghese of Varghese & Associates PC.

The government is represented by Tara M. La Morte of the U.S. Attorney’s Office for the Southern District of New York.

The case is U.S. v. Jain, case number 1:19-cr-00059, in the U.S. District Court for the Southern District of New York.

–Additional reporting by Pete Brush. Editing by Michael Watanabe.