NEW YORK (Reuters) – A founder of a New York hedge fund pleaded guilty on Wednesday to bankruptcy fraud for pressuring a rival not to bid on assets owned by Neiman Marcus creditors so he could buy them for a lower price, said the United States Department of Justice.
Daniel Kamensky, 48, of Roslyn, New York, filed his appeal before district judge Denise Cote in Manhattan.
Kamensky was a director of Marble Ridge Capital LP, a specialist in “troubled” investments that has had $ 1.2 billion in assets under management.
Kamensky’s lawyers did not immediately respond to requests for comment. Citing a guilty plea agreement, a spokesman for Kamensky said the defendant could face 12 to 18 months in prison under federal guidelines recommended in his May 7 sentence.
Prosecutors said Kamensky last summer threatened to exploit his role as co-chairman of a committee of Neiman creditors to prevent an investment bank from offering 30 cents a share for bonds he wants to buy for 20 cents a share.
Kamensky also threatened to stop doing business with the bank unless he backed down, and after that he asked an employee to lie about what had happened, prosecutors said.
“You understand … I can go to jail,” prosecutors quoted Kamensky as saying to the official. “It goes to the attorney general’s office in the United States.”
US Attorney Audrey Strauss said in a statement: “Your fraud has actually arrived at the US Attorney’s office and has now been revealed in open court”
Founded in Dallas in 1907, Neiman filed for Chapter 11 protection last May. The luxury retailer emerged four months later under new owners, including investment firms Pimco, Davidson Kempner Capital Management and Sixth Street Partners LLC.
A federal bankruptcy judge approved a settlement in December over Neiman’s actions against Kamensky.
Kamensky was a partner at hedge fund firm Paulson & Co before founding Marble Ridge in 2015.
Marble Ridge announced that it would liquidate last August, after Kamensky’s conduct was examined.
Jonathan Stempel reporting in New York; Additional reporting by Maria Chutchian and Nate Raymond; Bill Berkrot and Aurora Ellis edition