Saturday, July 12, 2014

Feds seek convicted Conn. financier's tax refund

June 29. 2013 10:36AM
Associated Press

Story Tools
PrintPrint | E-MailEMail | SaveSave | Hear Generate QR Code QR
Send to Kindle

(AP) Federal prosecutors want a Venezuelan-American financier to hand over a large tax refund while he awaits sentencing in a massive Connecticut-based fraud scheme, saying he misused an earlier refund and faces paying restitution that could be hundreds of millions of dollars.

Prosecutors say they believe the refund check to Francisco Illarramendi and his wife is for more than $2 million and want it deposited with the court pending his sentencing in September. Illarramendi pleaded guilty in 2011 to several counts of fraud and conspiracy to obstruct justice in a scheme to conceal huge losses.

Illarramendi ran unregistered hedge funds out of offices in Stamford. His biggest client was a pension fund for state oil workers in Venezuela. Prosecutors say Illarramendi transferred money among investment accounts without telling clients, falsified documents to deceive investors and used money provided by new investors to pay out returns he promised to earlier investors.

Illarramendi, pronounced ee-yah-rah-MEHN'-dee, had been under house arrest in New Canaan since entering the guilty plea, but a judge ordered him detained in January. The sentencing had been postponed several times as Illarramendi changed attorneys.

Prosecutors said in a court motion Thursday that the check is with an attorney for Illarramendi's wife. That attorney, Lindy Urso, said that he intended to file the check with a judge overseeing a lawsuit in the case, as required, and that he would be seeking a portion of the money to pay his client's living expenses. He said she's been forced to put herself and her children on state medical insurance and food stamps.

"She's now essentially a single mom trying to support a family with young children with no income whatsoever," Urso said in an interview Friday.

Prosecutors say they can't offer assurances that Illarramendi's wife would be given a portion of the check for living expenses. They said Illarramendi spent a state tax refund, leading them last year to ask that his bail be revoked.

Illarramendi is subject to an "enormous" restitution order that could be hundreds of millions of dollars, prosecutors said, arguing the court should take custody of the tax refund until the amount of the restitution is determined.

Prosecutors also questioned whether Illarramendi and his wife are entitled to any of the tax refund and said there's an asset freeze in place.

Stephan Seeger, Illarramendi's attorney, said he didn't object to the court deposit, but he disputes the government's loss figures.

"We hope to illustrate the difference to the court at our first opportunity, and until then, Mr. Illarramendi's claims to his income tax return, or any asset unrelated to his charged conduct, are preserved and he will assert them in the normal course," Seeger wrote in an email. "Depending upon how the law is applied in this case, the loss to victims could actually be zero."

Associated Press

comments powered by Disqus Commenting Guidelines
Mortgage Minute

Search for New & Used Cars

Used New All

Search Times Leader Classifieds to find just the home you want!

Search Times Leader Classifieds to find just what you need!

Search Pet Classifieds
Dogs Cats Other Animals

Social Media/RSS
Times Leader on Twitter
Times Leader on Youtube
Times Leader on Google+
The Times Leader on Tumblr
The Times Leader on Pinterest
Times Leader RSS Feeds