Hedge Fund Managers Fed Cash To $40M Ponzi, US Says

Law360, New York (February 23, 2012, 3:22 PM EST) -- Four hedge fund managers who allegedly told their customers they did due diligence on the prospects of Black Diamond Capital Solutions, which turned out to be a $40 million Ponzi scheme, were charged Wednesday with investment fraud conspiracy.

Jonathan D. Davey, 47, of Newark, Ohio; Jeffrey M. Toft, 49, of Oviedo, Fla.; Chad A. Sloat, 33, of Kansas City, Mo.; and Michael J. Murphy, 51, of Deep Haven, Minn., were charged in North Carolina federal court after a grand jury returned an indictment.

"The defendants lied...
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