Moore Charitable Foundation Revealed as Victim of $25 Million Scam

March 29, 2016; Business Insider

Yesterday, we reported that an unnamed New York-based charity had been stung for $25 million in a sham investment scheme run by Wall Streeter Andrew W.W. Caspersen, then a managing principal of Park Hill Group. The organization allegedly victimized has since been revealed as the twenty-year-old Moore Charitable Foundation, which funds environmental and social welfare causes. Caspersen has been charged by the Manhattan U.S. attorney’s office of duping the charity among others in a $95 million phony investment scheme.

The foundation, which reported that it had assets of approximately $189 million at the end of 2014, was founded by hedge fund billionaire Louis Bacon and was apparently under the purview of Moore Capital Management, which Bacon also founded. The foundation is saying that it was lied to, but we are still astounded at the lack of fiduciary oversight this seems to expose. Still, as the SEC’s Andrew Calamari put it, “Even sophisticated institutional investors are not immune to financial scams.”

It was only after Caspersen came back for a second bite at the apple, asking for an additional $20 million investment, that the foundation started to do deeper due diligence, then contacting the U.S. attorney’s office.

Bloomberg talked to Samuel Won of New York-based Global Risk Management Advisors, who said that Park Hill is “one of the most blue-chip of all third-party marketing firms,” which would have given an investor confidence in dealing with one of its executives. Still, all new investments should get extra scrutiny, and the deal, with its promised 15 percent annual interest payments on guaranteed principal, “sounded too good.”

“No matter how you slice it,” Won said, “I expect the information presented should have thrown up some red flags.”—Ruth McCambridge