IEAH Investor Tagliaferri Sentenced for Fraud
Description:
James Tagliaferri, a major investor in the IEAH Stables that raced Kentucky Derby winner Big Brown , has been sentenced to six years in prison for securities and investment adviser fraud.
Tiagliaferri, 75, the head of TAG Virgin Islands in St. Thomas, was convicted by a jury last July of securities and investment adviser fraud. Prosecutors said he invested more than $120 million of funds he oversaw at TAG Virgin Islands in private or illiquid companies in exchange for at least $3.35 million in kickbacks, according to Reuters news service.
According to Reuters, Tiagliaferri was found guilty on charges including investment adviser fraud, securities fraud, and wire fraud stemming from a scheme authorities said caused his clients to lose millions of dollars.
When some clients began demanding their promised returns, he used other clients' funds to repay them in a Ponzi scheme-like fashion, and to make payments for companies he was affiliated with, prosecutors said. Among those companies was International Equine Acquisitions Holdings Inc., the Garden City, N.Y.-based stable that included Big Brown, winner of the 2008 Kentucky Derby Presented by Yum! Brands (gr. I) and Preakness Stakes (gr. I).
Tagliaferri, a resident of Connecticut and the U.S. Virgin Islands, also created false documents to conceal his fraud, prosecutors said.
Reuters reported the scheme ran from 2007 to 2010 and aimed to defraud more than 100 clients of TAG Virgin Islands, which reported having about $252 million under management in 2009, prosecutors said.
In response to Tiagliaferri's request that he be spared prison time because he would lose his Social Security, New York U.S. District Court Judge Ronnie Abrams responded that it was a serious crime designed to make him money. She said his victims lost millions of dollars and their dignity, Reuters reported, and that prison time is necessary in part to warn others not to commit similar fraud.
Some of Tiagliaferri's victims also testified at the sentencing.