Woburn Man Sentenced for Defrauding $1.3 Million Through Fake Hedge Fund

WOBURN, MA—A Woburn man who defrauded investors of over $1.3 million in mostly retirement savings was sentenced to 42 months in prison Tuesday.

The U.S. Attorney's office announced Wednesday that Gregg D. Caplitz, 57, of Woburn was given a sentence of 42 months in prison, three years of supervised release and was ordered to pay restitution of nearly $1.9 million to victims. Caplitz and business partner Rosalind Herman defrauded over a dozen investors of more than $1.3 million dollars from 2008 to 2013, most of which was retirement savings.

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Herman, 60, of Woburn was convicted on charges of investment adviser fraud, tax fraud, wire fraud and conspiracy on April 6.

Caplitz and Herman pitched a new hedge fund company to investors, described as a hedge fund company owned by Herman. The described entity never existed, and funds were used for personal expenses by Caplitz and Herman.

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Caplitz pleaded guilty to charges of conspiracy to commit investment adviser fraud, wire fraud, submitting false statements to the U.S. Securities and Exchange Commission, defrauding the United States by impeding te IRS, investment adviser fraud, submitting false statements to the SEC, four counts of wire fraud, and five counts of filing false tax returns back in April of 2014.

According to the announcement, The case was prosecuted by Assistant U.S. Attorney Sara Miron Bloom of Ortiz's Economic Crimes Unit.