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A former hedge fund manager was convicted Wednesday of leading an investment scheme that caused clients, ranging from former NFL players to his mother, to lose millions of dollars while he spent the money on jewelry, real estate and a $500,000 wedding.
Kirk Wright, 37, of Marietta, Ga., faces up to what amounts to a life sentence after a federal jury found him guilty of mail fraud, securities fraud and money laundering.
The charges relate to the 2006 collapse of Wright's Atlanta-based hedge fund company, International Management Associates.
According to authorities, Wright and his company collected more than $150 million spread across thousands of client accounts since 1997 and used false statements and documents to mislead some of them to believe the value of those investments was increasing. Much of that money is missing.
Prosecutors said Wright had been lying to his investors since at least 2001 about their investments' performance and the balances in their accounts. He reported substantial investment gains almost every month; the evidence revealed that he lost almost every dollar invested in the market, prosecutors said.
They said he diverted millions of dollars of investor's money for personal expenses, including cash for himself and family members, jewelry, house renovations, a $500,000 wedding, up to six luxury vehicles, and multiple pieces of real estate, mainly in Atlanta and California.
While a prosecutor at a previous hearing described Wright's mother as one of his victims, Wright's defense lawyer has argued that his mother and other relatives wouldn't have been willing to post bond for him if they were truly victims.
Wright was arrested in May 2006 at a hotel in Miami Beach, Fla., where he was staying under an alias. Authorities have said nearly $30,000 in cash, several fake ID's and seven prepaid cell phones were found in Wright's hotel room. He also was carrying a journal that listed various U.S. cities and the "pros and cons" of hiding in each one, authorities said. The journal also included passport information and the phone numbers of embassies in Mexico and the Dominican Republican.
According to the U.S. Attorney's Office in Atlanta, Wright could receive a maximum sentence of 710 years in prison, a fine of up to $16 million and be ordered to pay restitution to the victims. He already has been hit with a $20 million judgment as part of a civil suit filed by the Securities and Exchange Commission. Sentencing is set for Aug. 26.
NFL Lawsuit
A suit against the NFL and its players union by six former players is still pending in federal court in Atlanta. The suit, which says the players lost over $20 million in the fraud scheme, claims the players union endorsed Wright's services even though Wright had liens against him.
The union filed a countersuit against the players, saying they violated a provision in union regulations that says the union does not endorse any of its registered financial advisers and is not responsible for the skill, honesty or competence of any registered adviser. The union also claims the players breached union rules by not exhausting internal remedies before suing the union.
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