BROOKLYN—A hedge fund manager was sentenced today in Brooklyn federal court to serve 78 months in prison for running a Ponzi scheme. Ward Onsa, 60, of Naples, Florida, the manager of New Century Hedge Fund Partners LP, was sentenced by U.S. District Judge Dora L. Irizarry. Onsa pleaded guilty in December 2011 to operating the scheme, which resulted in losses to investors of over $3 million dollars. The court also ordered restitution to be paid to the defendant’s victims.
The sentence was announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York.
According to court documents, the defendant operated Ward Onsa & Company, as an investment manager, until 2005, when a series of trading losses and default judgments bankrupted the entity. Onsa then organized the New Century Hedge Fund and, between 2005 and 2010, solicited and received over $5 million in investor funds, primarily from individual retirement accounts. Onsa told the New Century investors that their money would be used to purchase securities, futures contracts, and options designed to profit when the Dow Jones Industrial Average reached 10,748. Onsa’s trading theory was that the market would not go above this level. As the market surged past the 10,748 level, however, the investments that the defendant made with the New Century investors’ retirement money plummeted in value.
The defendant also funneled money from New Century to himself and his earlier Ward Onsa & Company investors. Instead of disclosing the trading losses or the payments to Ward Onsa & Company investors, Onsa issued fake account statements to his investors falsely claiming consistent and steady earnings in the market. The defendant continued to solicit additional money from New Century investors through 2010 and used that new money to pay back the losses of the earlier Ward Onsa & Company investors.
U.S. Attorney Lynch extended her grateful appreciation to the FBI, the lead agency in government’s criminal investigation.
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