Limo Driver Turned Hedge Fund Manager A Fraud : From Ukraine With Love
Alan Fishman spent years of escorting business executives around in his limos. Mr. Fishman was a Ukrainian limo driver turned hedge fund manager. He admitted he’s guilty of fraud.
In 2003 Mr. Fishman and two partners decided to launch a “hedge fund” of their own, A.R. Capital Global Fund.
Fishman is a 50year-old Ukraine native who resides in Brooklyn’s Brighton Beach. Last week Fishman pleaded guilty to conspiracy to commit securities fraud and is scheduled to be sentenced on June 18, according to a spokeswoman for the U.S. Attorney’s office in Manhattan. He also agreed to pay a $160,000 penalty.
Crain’s is reporting that according to his attorney, Don Savatta, Mr. Fishman came to the U.S. nearly 20 years ago and attended Temple University, where he majored in Russian literature and business administration. Around the turn of the millennium, his job was driving investment bankers and corporate lawyers to meetings or back to their homes. He decided to take a crack at his customers’ game.
A gentleman named Gary Gelman, who is Mr. Fishman’s nephew, was trying to launch a hedge fund. Although Mr. 
Fishman had no prior experience managing money, in 2003 he became president of the A.R. Capital Global Fund, which operated from a small office on 39 Broadway in lower Manhattan. Using cold calls, the fund lured in 70 clients who invested about $20 million. I am still amazed to this day that people respond to these cold calls. I doubt any of these investors did any due diligence or if they did they likely didn’t make it far enough to inquire why a limo driver was running a hedge fund. Simply amazing.
The fund managers told investors they would buy shares in overseas real estate companies and trade currencies, oil, gas and other commodities while using “active, leveraged trading” and “fundamental and technical analysis” to make money. None of this was true, according to prosecutors. Instead, client money was invested in three Ukrainian stocks or parked in a Ukrainian money market fund. Millions more were wired to bank accounts in Lithuania, including one held by a company located in St. Kitts and Nevis.
When one client visited New York to check on his investment, fund officials refused to meet at their office because they said it was being renovated—and met instead held at a nearby deli. Operational due diligence red flag anyone?
Mr. Fishman had primary responsibility for investment decisions, according to the government. His lawyer, Mr. Savatta, says Mr. Fishman continued working at the limousine company and served mainly as an administrator at the hedge fund.
Two of Mr. Fishman’s hedge fund colleagues, Daniel Ledven and Edward Veisman, also pleaded guilty last week. Veisman (according to this NASD bulletin) was barred from associating with any NASD member and fined $20,000 for failing to respond to NASD requests. I doubt this came out in any investor due diligence. The fourth defendant, Mr. Gelman, is a fugitive and believed to be in Ukraine. Good luck getting them back, or investors getting their money back.
