Lots of people were scratching their heads Monday trying to figure out why well-heeled, Ivy League-educated Wall Street executive Andrew Caspersen may have stooped to fraud, and swindled investors out of up to $95 million, as federal prosecutors charge.
Those people join others who for the past six years have been scratching their heads over the death of Caspersen's father, Finn M. W. Caspersen. The elder Caspersen was a prodigious political donor, Harvard booster, equestrian aficionado, pal of Queen Elizabeth II and former New Jersey Gov. Thomas Kean, and was the ex-CEO of consumer finance giant Beneficial — which his own father had previously headed.
When he fatally shot himself in 2009, Finn Caspersen and his family were reportedly worth up to $1 billion — but Finn may have been hiding a crime at the time: tax evasion.
Andrew Caspersen, 39, was charged by the Manhattan U.S. attorney's office in a complaint unsealed Monday that accused the private equity executive of duping investors, including a charity, into placing millions of dollars in a sham investment fund.
Caspersen, who had been a managing principal at Park Hill Group until the unit of PJT Partners fired him Monday, allegedly lost most of the funds in aggressive options trading, according to prosecutors.
Caspersen was released on $5 million bond, which was secured by an apartment he owns on the Upper East Side of New York City, another home in Westchester County, New York, along with the personal guaranties of his wife Christina and one of his three brothers, Finn Caspersen Jr. As a condition of his release, Caspersen, a graduate of both Princeton and Harvard Law School, must undergo alcohol treatment, court records show.
Daniel Levy, Caspersen's lawyer, declined to comment Tuesday when contacted by CNBC. One question posed to Levy was whether there was still a federal lien placed on a personal trust set up for the benefit of Andrew.
In 2009, The New York Times, quoting someone familiar with an investigation into Finn Caspersen, reported that federal authorities earlier that year had placed liens on a personal trust for Andrew, as well as on personal trusts set up for Finn's other three sons: Finn Jr., Erik and Samuel Caspersen. That story and others suggested that the family's financial position may not have been nearly as secure at it seemed on the surface when the sons' father took his own life.
Henry Christiansen III, a lawyer for the the brothers, did not immediately respond to a request for comment from CNBC. A spokesman for the Internal Revenue Service had no immediate comment when asked about either the liens, or about a probe of Finn Caspersen Sr.'s taxes.
The Times story was published on the heels of Finn Caspersen's suicide at age 67 on Sept. 7, 2009, in Rhode Island. A Brown University and Harvard Law grad, Finn shot himself near a reservoir adjacent to a $41 million golf club that he had helped build with a group of other partners.
An article in Vanity Fair, quoting friends and others familiar with Caspersen, said he was suffering from kidney cancer at the time of his Labor Day death, and was undergoing chemotherapy. The article also noted that police reported that he had "suffered from major depression," and was taking multiple medications to deal with his mental and physical ailments. A suicide note found in Caspersen's shirt said he was "tired, diminished and in constant pain," and "did not want to be a burden to his loving family."
Finn Caspersen also was reportedly facing a tax investigation from federal authorities.
The Times reported in 2009 that Caspersen "was suspected of dodging many millions of dollars in federal taxes," and was suspected of using overseas bank accounts to avoid paying taxes.
The IRS "learned that Mr. Caspersen held an account at LGT, the private bank controlled (by) Liechtenstein's royal family," the Times reported, citing a source familiar with the investigation. The tiny nation of Liechtenstein has for decades been a favored tax haven for wealthy Americans.
The Times also quoted a person who had been briefed on the probe as saying authorities believed Caspersen might end up owing as much as $100 million in back taxes and fines, plus a potential prison term.
In the months before his suicide, Caspersen resigned from several philanthropic organizations he headed, put his Rhode Island properties up for sale for almost $11 million, and also was in the process of trying to sell the home he and his wife had on ultra-exclusive Jupiter Island in Florida.
Those real estate moves suggested that Caspersen may have felt he was going to need cash, soon.
Nathaniel Reed, whose parents had once owned most of Jupiter Island, told The Stuart News/Port St. Lucie News on the heels of Caspersen's death that his friend Caspersen was dealing with "this unbelievable financial situation," which combined with his health condition "must have been of critical importance in his decision" to kill himself, the Vanity Fair article noted.
Another friend, Fred Whittemore, told Vanity Fair that Caspersen was "very aware" before his death of a Sept. 23, 2009, deadline for Americans who had overseas accounts and who had not been paying taxes on the funds to apply for an amnesty from criminal prosecution. Caspersen killed himself 16 days before that deadline.
"I don't know how he avoided the IRS for so many years and then got into trouble," Whittemore told the magazine.
Denis Conlon, a Chicago lawyer who reportedly represented Caspersen's estate in the tax probe, did not respond to a request for comment from CNBC.