Press Release
FUGITIVE FINANCIER SALMAN SHARIFF ARRESTED
March 24, 2008
FOR IMMEDIATE RELEASE
R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge of the Federal Bureau of Investigation, Miami Division, announced today that fugitive financier Salman Shariff has been arrested based on fraud and money laundering charges contained in a 2003 Indictment relating to Shariff’s operation of several hedge funds in Miami, Florida. Shariff had his initial appearance in court in the Southern District of Florida on March 12, 2008, after having been arrested in Queens, New York, earlier this year. Shariff currently is being detained in the Southern District of Florida pending trial later this year.
In the Indictment, Shariff is charged with forty-three (43) counts of mail, wire, and securities fraud and money laundering relating to his operation of several hedge funds from March 1996 through June 2001. Shariff managed the hedge funds through two companies he controlled named Vestron Financial Corporation and Crescent Holdings Corporation. Investors bought partnership interests in the hedge funds – named the Vestron Investment Club, Crescent Capital Partners L.P., and Crescent Capital Offshore Fund – in response to being told that their money would be invested on their behalf in securities and commodities. In turn, Shariff, Vestron Financial and Crescent Holdings would allegedly profit by receiving fees based on the investment returns generated by the hedge funds and the amount of assets the hedge funds managed.
As alleged in the Indictment, the hedge funds received approximately $10,900,000 from investors from in or around January 1998 through in or around June 2001. Of that amount, Shariff invested less than half (50%) in securities and commodities on investors’ behalf. Instead, Shariff misappropriated approximately $2,000,000 of investors’ money to pay for personal expenses, including, among other things, the purchase of an oceanfront condominium on Miami’s South Beach, a 42 foot yacht, a 1988 Ferrari Testarossa sports car, a 1999 Lexus LX 470 Sports Utility Vehicle, a 2000 BMW X5 Sports Utility Vehicle, a 2001 Chevrolet Corvette sports car, a Ducati SS900 motorcycle, and a Miami Beach modeling agency for his girlfriend to operate.
In addition, the Indictment alleges that Shariff misdirected money he received from some investors to make distributions to other investors who requested to receive their profits on a monthly basis or who occasionally withdrew money from their investment accounts. In total, Shariff made distributions of more than $4,000,000 in this manner thereby creating a false sense of assurance among investors that their money was safe. Shariff also misappropriated more than $650,000 of investors’ money to pay for various Vestron Financial business expenses, including, among other things, employee salaries, rent for office space, and corporate income taxes.
To further perpetuate the scheme, Shariff represented to investors that the investment returns generated by Vestron Financial for the years 1997, 1998, 1999, and 2000 were 86.1%, 81.8%, 84.4%, and 58.8%, respectively, whereas, in truth and in fact, Shariff’s trading activity generated losses in three out of four of those years, and in 1998, the only year that yielded a positive return, the actual rate of return was significantly less than was represented to investors.
Shariff faces a maximum penalty of five (5) years’ incarceration on each mail and wire fraud count, ten (10) years’ incarceration on each securities fraud count, and twenty (20) years’ incarceration on the money laundering counts.
Mr. Acosta commended the investigative efforts of the Federal Bureau of Investigation, as well as the cooperation of the Southeast Regional Office of the United States Securities and Exchange Commission, and the South Florida region of the State of Florida Office of the Comptroller, Department of Banking and Finance. The case is being prosecuted by Assistant United States Attorney Harold E. Schimkat.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
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