PORTLAND, Ore. (KOIN) — Three former executives of the now-inoperative Lake Oswego investment firm Aequitas Management, LLC were sentenced to federal prison on Thursday after being convicted of defrauding nearly $300 million from investors.
Robert J. Jesenik, 63, the former CEO of Aequitas and a Lake Oswego resident, was sentenced to 14 years in prison and was ordered to pay $1.5 million. Andrew N. MacRitchie, 59, the company’s executive vice president who is formerly of Palm Harbor, Fla., received a 70-month sentence and was ordered to pay $689,662. Brian K. Rice, 56, the executive vice president and a Portland resident, was sentenced to 37 months in prison and ordered to pay $116,627.
All three men were found guilty in May by a federal jury of conspiring with one another to commit mail and wire fraud and 28 individual counts of wire fraud.
Officials say restitution will be determined at a later date.
“When a large investment company led by greedy executives collapses, it can destroy the lives of the victim investors and their families. The victims in this case experienced delayed retirements, lost college savings, physical and mental illness, and many lives were forever changed because of these defendants,” said Ethan Knight, chief of the Economic Crimes Unit for the U.S. Attorney’s Office. “Bob Jesenik and other former Aequitas executives cheated their investors out of millions and went to extraordinary lengths to cover up the rapidly declining financial condition of their company. The sentences imposed today reflect the seriousness of these crimes and should serve as warning to other executives or financial professionals contemplating fraud as a viable path to wealth.”
“This is one of the largest fraud cases ever investigated by the Portland FBI with hundreds of millions of dollars in losses,” added Kieran L. Ramsey, special agent in charge of the FBI Portland Field Office. “For years, the defendants deliberately deceived countless investors both internationally and domestically through an elaborate web of lies. Many of those investors were right here in Oregon. These sentences send a strong message that the FBI, our partners, and the United States Attorney’s Office will continue to work together to investigate and prosecute those who perpetrate these kinds of fraud schemes for their personal gain.”
According to court documents, Jesenik, MacRitchie, Rice and others used Aequitas to solicit investments in a variety of ways and misrepresented Aequitas’ use of investor money from 2014 to 2016. The executives were also accused of misrepresenting the financial health and strength of the company and its subsidiaries and the risks associated with its investments and investment strategies.
Together, the convicted executives did not disclose information like its near-constant liquidity and cash-flow crises, the use of investor money to repay other investors and to pay operating expenses, and the lack of collateral to secure funds, the U.S. Attorney’s Office for the District of Oregon said.
Aequitas was founded by Jesenick in 2005. According to the U.S. Attorney’s Office, its largest holdings were from various hospital networks, a consumer debt consolidator, a motorcycle lender and Corinthian Colleges. The student loans Aequitas owned from Corinthian Colleges totaled more than $200 million and were by far the company’s largest single category of receivables, prosecutors said.