Friday, July 25, 2014


The Connecticut Federal trial judge in Francisco Illarramendi's Ponzi scheme case has denied the defendant's motion to be release from custody, purportedly in order to prepare for trial. His counsel had argued that the complex hedge fund case required the defendant's attention, to assist in his defense, and that he could not accurately compute the precise loss suffered by victims while incarcerated.

Though the text of the order, captioned "Order Denying Motion for Temporary Release," has not been made available yet, the US Attorney has previously stated, in opposition to Illarramendi's release, that he is a flight risk, that he previously demonstrated misconduct while out on bail, and that he has already admitted a loss of more than $300m. His release prior to trial was no expected by observers of Federal Ponzi scheme cases.

Illarramendi did get one small victory, though; the Court again granted his motion to delay the trial, which was scheduled for August. It has now been set for October 28,2014. The defendant has gone through several lawyers during the pendency of his case; apparently he is rarely happy with the efforts of competent counsel. Perhaps he needs to face the fact that a guilty plea is his best course of action, as putting the government through a costly and time-consuming trial will only hurt him at sentencing. The case has been pending for years; he should consider damage control, such as it available to him at this late date, and plead out.

There may be another reason why he has chosen to go to trial in an obviously losing case; he may fear physical harm will come to him if he gives evidence against others linked to the Ponzi scheme. We have identified the other players, powerful financiers thus far unindicted, who could turn on him if he incriminates them. We will be discussing again on this blog.

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