BRIDGEPORT, Conn. – A Venezuelan man admitted his involvement Thursday in an attempted cover-up of a Connecticut-based pyramid scheme, becoming the third person to plead guilty in one of the biggest white-collar criminal cases in state history.
Federal prosecutors say Juan Carlos Horna Napolitano helped disgraced financer Francisco Illarramendi by filing paperwork attesting to money that did not exist, an effort to throw off investigators from the U.S. Securities and Exchange Commission.
Illarramendi is awaiting sentencing after pleading guilty in March to fraud and other crimes related to his handling of hedge funds in Stamford, Conn. A pension fund for Venezuela's national oil company accounted for most of the investment, and investigators say as much as hundreds of millions of dollars could be lost.
Illarramendi, a Venezuelan-American, is under home confinement orders and faces up to 70 years in prison. The New Canaan man was accused of transferring money among investment accounts without telling clients to cover up huge financial losses and then falsifying documents to deceive investors, creditors and investigators.
Horna, a 40-year-old resident of Pembroke Pines, Fla., pleaded guilty Thursday in federal court in Bridgeport to one count of conspiracy to obstruct an official SEC proceeding.
He and a Venezuelan accountant who pleaded guilty earlier this month, Juan Carlos Guillen Zerpa, expected to receive at least $3 million in exchange for misleading the SEC and investors into believing that one of the funds had $275 million in credits that did not exist, according to the Connecticut U.S. attorney's office.
Authorities say the two men conspired to make sure the companies that purportedly owed the missing money would support the story if contacted by federal investigators.
Horna and Guillen each face sentences of up to 20 years in prison and fines up to $2.5 million.