Benjamin Koifman was sentenced to five years and three months in prison after pleading
guilty to conspiracy for his role in a scheme to cheat investors with a phony New York-based hedge fund.
According to prosecutors in the office of Manhattan U.S. Attorney Preet Bharara, William Shternfeld and Koifman ran A.R. Capital Global Fund LP, an unregistered investment adviser, and ARC Global Fund, a hedge fund that said it invested in equity of international real estate.
The same judge that sentenced Koifman says he intends to impose the same sentence on Shternfeld in October after the defendant undergoes a medical evaluation.
From 2004 to 2006 Shternfeld and Koifman engaged in a scheme with co-conspirators to get at least 70 investors to invest about $20 million in the ARC Global Fund by making false statements about it, according to prosecutors.
While pleading to the judge for a light sentence, Koifman, 36, cried three times during his remarks in his hearing. “I did terrible things,” Koifman told Stein. “This mistake has caused people including my family to suffer.”
Koifmans sentence also included three years supervised probation and was ordered to pay restitution of $7 million. According to Judge Stein, the same probation and restitution will be ordered for Shternfeld. As part of their plea agreement, Koifman and Shternfeld have paid $50,000 of the restitution so far.
“He knew this was a fraud,” the judge said to Koifman’s lawyer, Arthur Gershfeld. “He kept calling elderly people. They took the money and ran. That’s pretty pernicious.”
Michael Rosen, Shternfeld’s lawyer, argued that the Bureau of Prisons may not be properly suited to treat Shternfeld, as he has oral cancer and needs adjustments in his mouth prosthesis every few months.
“I’m ready to be sentenced,” Shternfeld said in court. “But do I have to go through torture every day?”