Saturday, March 26, 2016



The Second Circuit Court of Appeals has affirmed the thirteen year (156 month) sentence imposed upon the Venezuelan Ponzi schemer, Francisco Illarramendi, by the District Court in Connecticut. The appellant had sought to reduce the sentence handed down after he pled guilty to managing a hedge fund that became a $723m Ponzi scheme, after it sustained major losses. He claimed that the calculation of losses was incorrect and inaccurate.

Illarramendi disputed the amount of the loss sustained by the victims, which included the pension fund of PdVSA, the Venezuelan Government oil company. The Court, in a Summary Order recited:

(1) The District Court found that the losses sustained exceeded $200m, according to the SEC.
(2) The Court-appointed Receiver calculated the loss at $380m.
(3) The appellant himself stated that the losses exceeded $300m.

The Court found that the trial judge set the losses at an amount most favorable to the appellant, which justified the sentence pronounced.

The case was replete with attempts by the appellant to game the court system; he changed attorneys frequently, and sought additional time after each change of counsel; he frequently complained that the conditions of his incarceration did not permit him to assist his lawyers. His pre-trial release was eventually revoked for misconduct by the Court. He repeatedly sought an evidentiary hearing on losses. All his tactics delayed the proceedings for many years, but this latest decision ends his appeals as a matter of right, and provides a degree of finality to the case; Any additional actions he brings will be completely discretionary with the Court, and have little, if any, chance of success. His release date is in 2024.
United States of America vs. Illarramendi, Case No: 15-526 (2nd Cir. 2016)

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