George Heckler, of Charleston, South Carolina, operated a decade-long fraud through three private hedge funds, Cassatt Short Term Trading Fund LP (Cassatt), CV Special Opportunity Fund LP (CV Special), and Conestoga Holdings LP (Conestoga). This fraud caught my attention because my brother and mom both live in South Carolina.
Heckler’s initial fund was Conestoga, which was formed in 1998. Unfortunately, the fund had a big investment in an illiquid investment and that investment went south, resulting in millions of dollars in losses.
Rather than admit to the problem, Heckler raised new cash to pay off Conestoga investors looking to exit. He raised the additional funds, in part, to repay the Conestoga investors. He convinced a fund administrator to help him with the fraud. He used the Cassat and CV Special capital raises to pay off investors in Conestoga. He falsely stated in those fund financial statements that the funds were properly invested.
Although Heckler has not agreed to the SEC charges, he did plead guilty to the criminal charges brought by the Department of Justice.
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