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Infinity Q founder sentenced to 15 years for lying about asset values

2023-04-10T20:51:41Z

The founder of Infinity Q Management, which once claimed to manage $3 billion, was sentenced to 15 years in prison for misleading investors about the value of assets the New York firm managed, U.S. Attorney Damian Williams said on Monday.

U.S. District Judge Denise Cote sentenced James Velissaris, 38, on Friday after rejecting his recent request to withdraw his guilty plea, which he entered in November.

“We hope this lengthy sentence resonates in the financial sector and deters anyone who may be tempted to lie to investors,” Williams said in a statement.

A spokesperson for Velissaris declined to comment.

Prosecutors said Velissaris misled investors and regulators by promising to fairly value over-the-counter derivative positions that comprised much of a mutual fund and hedge fund he ran.

Velissaris instead mismarked many holdings, sometimes inflating values to “impossible” levels and concealed the mismarking from auditors, to increase management fees and retain investors, they said.

In requesting to withdraw his guilty plea, Velissaris argued that he did not commit a crime because Infinity Q had disclosed it might value assets differently than an independent pricing service it used.

Velissaris also said his plea was involuntary as he was affected by depression and “overwhelmed by pressure” from prosecutors and his former lawyers to take a plea deal.

In a ruling denying the request, Cote said Velissaris had said under oath that he was entering his plea voluntarily.

His decision to plead guilty to one count of securities fraud instead of going to trial on multiple charges “makes rational sense,” the judge said.

Velissaris also said he had evidence he argued showed his innocence at the time he pleaded guilty, the judge said.

Prosecutors had asked for a “substantial” prison sentence without recommending a specific term. Velissaris had asked for home confinement, saying it would allow him to receive comprehensive mental health treatment.

The case is U.S. v. Velissaris, U.S. District Court, Southern District of New York, No. 22-00105.