Martin Garvey

There have been two new legal developments at the U. S. District Court for the Southern District of Florida concerning the U. S. Securities and Exchange Commission's investigation into the Lancer Offshore group of hedge funds, which collapsed in 2003 after losing at least $500 million due to fraud by insiders; and The Serious Fraud Office in the United Kingdom enhanced its reputation as an ineffective law enforcement agency when it failed to secure a single conviction against three former officers of Imperial Consolidated at their High Court trial in London.

Former hedge fund manager Michael Lauer and four others have been indicted in the United States on charges that they helped to defraud investors in the Lancer Offshore group of more than $200 million. Lauer, Martin Garvey, Eric Hauser, Laurence Isaacson, and Milton Barbarosh were each indicted on one count of conspiracy to commit fraud and six counts of fraud at the U. S. District Court for the Southern District of Florida on January 29, 2008. The indictment was sealed until February 19, 2008 so arrests could be effected.

Fund administrator Citco knew that Lancer Offshore was fraudulently valuing assets nearly two years before the fund collapsed but its sole concern was how to extricate itself from the $400 million insolvency, rather than warn investors and regulators. That is the most serious allegation contained in a civil lawsuit that was filed as long ago as January 14, 2005 at the U. S. District Court for the Southern District of Florida but kept sealed until February 21, 2006 due to concerns that its release may breach a court order prohibiting disclosure of certain information. It is supported by copies of extraordinary email exchanges between Citco's senior executives that were disclosed in discovery that Citco opposed.

Former hedge fund boss Michael Lauer's "girlfriends" and stock "valuation shills" are among the defendants in the latest lawsuit filed in Miami by the Receiver of the Lancer Offshore group. "Lauer would often use the Girlfriends to assist him in violating his duties to the Funds by placing valuable assets, including aircraft and cash, in their names in an effort to prevent investors and/or the SEC from seizing such assets," stated the complaint.

OffshoreAlert has found two more civil lawsuits filed by the Receiver of Lancer Offshore and related parties against alleged recipients of money transfers from the failed hedge fund group.Last month, we reported that Marty Steinberg had filed a lawsuit on July 9, 2004 at the U. S. District Court for the Southern District of Florida against 26 defendants - mainly financial institutions - in which he sought more than $17 million.

A United States court has issued a temporary order freezing the assets of the Lancer Offshore Group, which has been implicated in a massive securities fraud.The assets were frozen on July 10, 2003 at the U. S. District Court for the Southern District of Florida following a complaint filed by the Securities & Exchange Commission.