Tweet
Carton was arrested at his Manhattan home Wednesday and charged with ripping off investors, including a New York hedge fund.
In the NYC area, Craig Carton is a relatively well known radio personality. Carton had been fairly well regarded in the area, raising money for charities and other good causes. Apparently he had accumulated some gambling debts and created a fake ticket selling operation to raise money from investors to pay off those debts.
One of the defrauded investors was an $18B hedge fund that had recently won hedge fund of the year. There is little doubt that the hedge fund made serious mistakes in its diligence. Nonetheless, Carton and his associates allegedly forged signatures on fraudulent contracts to trick the hedge fund into wiring almost $5M to Carton's phony businesses.
While this may not have made much news outside of NYC, I think it again highlights the risks of investing in small-scale, unaudited operations promising attractive returns, as is often discussed on this board. I know whole life insurance has the market cornered on scorn around here, but legitimate cons are much more devastating to personal wealth than buying a whole life policy.
In this case, Carton was a trusted member of the community. He used that trust and connections developed through his charity work to con sophisticated investors into giving him money. I am sure the hedge fund deeply discounted the possibility of fraud given Carton's level of "fame" and personal relationships with some of the principals at the hedge fund. This isn't that different from some arguments I see on this board, with people investing in small real estate or other small ventures with people they know and "trust." In situations like this, cases of fraud (or simple stupidity and errors) are rampant, which leave the business worthless. Often the fraudster will tell you the business failed and will make off with your money. In Carton's case, the hedge fund is sophisticated enough to at least make sure the perpetrators will be prosecuted. If you are defrauded, you will likely have little-to-no recourse.
Anyway, just another example of how you need to be vigilant with your hard earned money!
In the NYC area, Craig Carton is a relatively well known radio personality. Carton had been fairly well regarded in the area, raising money for charities and other good causes. Apparently he had accumulated some gambling debts and created a fake ticket selling operation to raise money from investors to pay off those debts.
One of the defrauded investors was an $18B hedge fund that had recently won hedge fund of the year. There is little doubt that the hedge fund made serious mistakes in its diligence. Nonetheless, Carton and his associates allegedly forged signatures on fraudulent contracts to trick the hedge fund into wiring almost $5M to Carton's phony businesses.
While this may not have made much news outside of NYC, I think it again highlights the risks of investing in small-scale, unaudited operations promising attractive returns, as is often discussed on this board. I know whole life insurance has the market cornered on scorn around here, but legitimate cons are much more devastating to personal wealth than buying a whole life policy.
In this case, Carton was a trusted member of the community. He used that trust and connections developed through his charity work to con sophisticated investors into giving him money. I am sure the hedge fund deeply discounted the possibility of fraud given Carton's level of "fame" and personal relationships with some of the principals at the hedge fund. This isn't that different from some arguments I see on this board, with people investing in small real estate or other small ventures with people they know and "trust." In situations like this, cases of fraud (or simple stupidity and errors) are rampant, which leave the business worthless. Often the fraudster will tell you the business failed and will make off with your money. In Carton's case, the hedge fund is sophisticated enough to at least make sure the perpetrators will be prosecuted. If you are defrauded, you will likely have little-to-no recourse.
Anyway, just another example of how you need to be vigilant with your hard earned money!
Comment