Ponzi-Like Scheme Alleged in Indictments of Insiders at Platinum Partners L.P. and Black Elk Energy Offshore Operations, LLC

The Justice Department has unsealed indictments against seven individuals, all of whom are or have been affiliated with Platinum Partners L.P. (Platinum), purportedly a $1.7 billion hedge fund based in New York City.

Charges Against Platinum

Charged with securities fraud, investment adviser fraud, securities fraud conspiracy, investment adviser fraud conspiracy, and wire fraud conspiracy are Mark Nordlicht, the founder and Chief Investment Officer of Platinum; David Levy, the co-Chief Investment Officer of Platinum; Uri Landesman, the former Managing Partner and President of Platinum; Joseph SanFilippo, the Chief Financial Officer of Platinum’s signature hedge fund; and Joseph Mann, a member of Platinum’s Investor Relations and Finance Departments. These five men are alleged to have defrauded investors through, among other things, the overvaluation of their largest assets, the concealment of severe cash flow problems at Platinum’s signature fund, and the preferential payment of redemptions.

Also indicted were Daniel Small, a former Managing Director and co-Portfolio Manager of Platinum; and Jeffrey Shulse, the former Chief Executive Officer and Chief Financial Officer of Black Elk Energy Offshore Operations, LLC. These two men, along with Nordlicht, Levy, Landesman, SanFilippo and Mann, are charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy for defrauding Black Elk’s independent bondholders through a fraudulent offering document and diverting more than $95 million in proceeds to Platinum by falsely representing in the offering document that Platinum controlled approximately $18 million of the bonds when, in fact, Platinum controlled more than $98 million of the bonds.\r\n\r\nFull details are set forth in the U.S. Attorney’s Press Release, which can be viewed here.

Securities Attorneys Can Help You Recover

Large ponzi schemes like this one are incredibly complex and involve extensive and time-consuming investigation and sorting of information. Because the indicted perpetrators are unlikely to be collectible, the goal of a securities litigator is to determine whether there are any solvent persons and entities who may have aided the scheme or performed some essential role in it, and to pursue viable claims against such persons.\r\n\r\nIf you were a victim of Platinum Partners L.P. or Black Elk Energy Offshore Operations, L.L.C., please call us immediately to discuss ways we can potentially help you to recover some or all of your losses.  Contact attorney Hugh Berkson in Cleveland at (216) 696-1422 or toll free at (866) 932-1295 for a free evaluation of your recovery options. You can also send an email to hdb@mccarthylebit.com or reach us by filling out the form to the right.