Three Indicted for Investment Fraud
NEW YORK (AP) _ A former Bear Stearns & Co. executive and two other people were indicted Wednesday in an investment-fraud scheme in which investors lost up to $250,000, federal prosecutors said.
Michael Hedges, 59, a former managing director at the financial services firm, opened and operated a Bears Stearns account in which his two alleged cohorts deposited investor funds in September and October of 1994.
They promised an unspecified number of investors high returns, and in one case, matching corporate funds to benefit children’s education, according to the complaint filed in Brooklyn federal court.
Shortly after going into the Bear Stearns account, the funds allegedly were transferred to the accounts of Xavier Fazio, 40, of Jericho, N.Y., and David Friedmann, 52, a financial consultant in Spring, Texas.
The indictment said the three men used the money for personal expenses and travelers checks.
All three are charged with wire fraud, conspiracy to commit wire fraud and money laundering. If convicted, they could each face up to 20 years in prison and fines of $500,000.
A message seeking comment on the case left on the answering machine of a Bear Stearns spokeswoman late Wednesday was not immediately returned.