Contact Us
New Canaan Daily Voice serves New Canaan, CT

Menu

New Canaan Daily Voice serves New Canaan, CT

Nearby Towns

news

New Canaan Man Convicted Of Ponzi Scheme Ordered To Pay $26.8 Million

A New Canaan man convicted of running a Ponzi scheme has been ordered to pay nearly $27 million, the SEC announced.
A New Canaan man convicted of running a Ponzi scheme has been ordered to pay nearly $27 million, the SEC announced. Photo Credit: File

NEW CANAAN, Conn. -- A former New Canaan man convicted of running a Ponzi scheme that defrauded victims out of hundreds of millions of dollars has been ordered to pay nearly $26 million to investors he defrauded.

Francisco Illarramendi is currently service a 13-year sentence after pleading guilty in connection with running the scheme from his hedge fund that cost investors millions in losses. He pleaded guilty in 2011 and was sentenced in 2015.

The Securities and Exchange Commission announced that on Wednesday, a judge for the U.S. District Court for the District of Connecticut ordered that Illarramendi pay $25,844,834 to his investors, as well as a $1 million civil penalty, and be subject to a permanent injunction against future violations of the Investment Advisers Act.

Related story: New Canaan man gets 13 years for running Ponzi scheme

In late 2005, one hedge fund he advised lost $5 million of the money he was charged with investing. Rather than disclose the losses, Illarramendi concealed this information by engaging in a scheme to defraud and mislead his investors and creditors.

As a result of the scheme, the hedge funds and related entities managed and advised by Illarramendi had outstanding liabilities that greatly exceed the true value of their assets, causing the funds’ investors, creditors and service providers to lose more than $700 million.

to sign up for Daily Voice's free daily emails and news alerts.

Welcome to

New Canaan Daily Voice!

This is a one time message inviting you to keep in touch

Get important news about your town as it happens.