AML / CFT: US reclaims USD230 million from offshore fund

The money was frozen by a court order and remains frozen in the hands of the SEC.

In a filing in the U.S. District Court for the District of Connecticut, the SEC said the money was returned as a result of the court order obtained by the SEC in its case against Francisco Illarramendi of Connecticut and his firm Highview Point Partners LLC, which managed three hedge funds.

The SEC issued proceedings against Illarramendi and his unregistered investment advisory firm MK Capital Management in January alleging that he ran a multi-year, multi-million dollar Ponzi scheme. Stamford, Conn.-based Highview was added as a defendant in May. Three "hedge funds" managed by Highview and several entities affiliated with MK Capital Management were named as relief defendants for allegedly holding funds tainted by the Ponzi scheme.

After an evidentiary hearing, the Honorable Janet Bond Arterton, U.S. District Judge for the District of Connecticut, entered an order on June 16 freezing the assets of three hedge funds and ordering that all assets of the funds, including USD230 million held in an offshore account, be immediately returned to the U.S.

Judge Arterton had previously frozen the assets of Illarramendi, Highview, MK Capital Management, and several affiliated entities.

In its filing, the SEC informed the court that the USD230 million was received last week and is being held in a bank within the U.S.