INVESTMENT ADVISOR SENTENCED TO PRISON FOR ROLE IN $9 MILLION INVESTMENT FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 

Wednesday, November 4, 2015

Florida Investment Advisor Sentenced to 18 Months in Prison for Orchestrating $9 Million Investment Fraud Scheme

A Tampa, Florida, area investment advisor was sentenced to 18 months in prison today for perpetrating a $9 million investment fraud scheme involving Facebook stock.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) Miami Division made the announcement.

Gignesh Movalia, 40, a registered investment advisor, was also ordered by Chief U.S. District Judge Steven D. Merryday of the Middle District of Florida to pay $5,394,419 in restitution and to three years of supervised release following his prison sentence.  Movalia pleaded guilty on Aug. 13, 2015, to one count of investment advisor fraud.

In connection with his guilty plea, Movalia admitted that he founded OM Global Investment Fund LLC in 2009 and subsequently used the fund to defraud investors.  Specifically, in 2011 and 2012, Movalia raised more than $9 million from 130 investors by falsely claiming to have access to pre-initial public offering shares of Facebook Inc.  Rather than using this money to buy Facebook shares as promised, however, Movalia invested the money in other securities and concealed that fact from investors.  By September 2013 when it went into receivership, the OM Global Fund lost approximately $9 million, with $6 million of those losses as a result of the fraud scheme.

The case was investigated by the FBI and USPIS, with assistance provided by the U.S. Securities and Exchange Commission’s Miami Regional Office.  The case was prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.

FLORIDA RESIDENT PLEADS GUILTY FOR ROLE IN $9 MILLION INVESTMENT FUND FRAUD

FROM:  U.S. JUSTICE DEPARTMENT

Thursday, August 13, 2015

Florida Investment Advisor Pleads Guilty to Orchestrating $9 Million Investment Fraud Scheme

A Tampa, Florida, area investment advisor pleaded guilty today to perpetrating a $9 million investment fraud scheme involving Facebook stock.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) Miami Division made the announcement.

Gignesh Movalia, 40, of Tampa, a registered investment advisor, pleaded guilty before U.S. Magistrate Judge Anthony E. Porcelli of the Middle District of Florida to one count of investment advisor fraud.  Sentencing will be scheduled at a later date.

Movalia was the founder and manager of OM Global Investment Fund LLC (the OM Global Fund), an investment fund formed in 2009.  According to admissions made in connection with his guilty plea, beginning in or about 2011, Movalia began soliciting investments for the OM Global Fund by, among other methods, touting access to pre-initial public offering (IPO) shares of Facebook Inc.  Movalia admitted that, by the end of 2012, he had raised more than $15 million for the OM Global Fund, and that more than $9 million of the amount raised was for “side pocket” investments, which Movalia represented were to be used exclusively for purchasing of Facebook shares.

Movalia further admitted that, contrary to these representations and unknown to “side pocket” investors, he used funds designated exclusively for the purchase of Facebook shares for other investments, which he concealed from the investors.  He also admitted that he made material misrepresentations and omissions to investors in order to mislead them about the nature and value of their investments in the OM Global Fund.  The OM Global Fund lost approximately $9 million before it went into receivership in September 2013.

The case is being investigated by the FBI and USPIS, with assistance provided by the U.S. Securities and Exchange Commission’s Miami Regional Office.  The case is being prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.