With a sentencing date in hand, a federal prosecutor is pressing forward with a bond revocation hearing for Francisco Illarramendi, the wealthy owner of a group of Stamford-based hedge fund involved in a Bernard Madoff-like Ponzi scheme that may have cost investors hundreds of millions of dollars.
U.S. District Judge Stefan R. Underhill set Oct. 29 for sentencing Illarramendi, 43, of New Canaan, who owned the Michael Kenwood Capital Management Group in Stamford. Illarramendi pleaded guilty on March 7, 2011, to wire, securities and investment adviser fraud as well as a conspiracy charge. Those charges carry up to 70 years in prison and more than $5 million in fines.
Previously Underhill sentenced Juan Carlos Guillen Zerpe, a 43-year-old Venezuelan accountant, and Juan Carlos Horna Napolitano, a 40-year-old real estate manager in Florida, to 14-month federal prison terms for their involvement in the scheme.
Additionally, the judge granted Assistant U.S. Attorney Paul Murphy's request to conduct a hearing on Friday that might result in Illaramendi's bond being revoked and his being detained pending sentencing. Illaramendi is represented by Alex Hernandez, a former federal prosecutor who headed the U.S. Attorney's Bridgeport office.
One of the biggest investors was Petroleos de Venezuela, that country's state-owned oil company, which placed its pension monies in Illarramendi's funds.
On Tuesday, Illarramendi reached an agreement with the Securities and Exchange Commission on a civil suit freezing $793,117 which includes a $637,576 tax refund from Connecticut. That tax refunds is to be turned over to the receivership estate.
Additionally, Illarramendi must provide a detailed accounting of all transferred assets within the next 10 days as well as monthly accountings.