Ex-Montclair Hedge Fund Owner Gets 6 Years For $4M Scam

MONTCLAIR, NJ — A former Montclair hedge fund owner was sentenced to six years in prison Thursday after he scammed investors out of $4 million to pay for his $1 million home, a new Range Rover, a $10,000 diamond ring and $500,000 in credit card debt, federal prosecutors said.

In addition to the prison term, Nicholas Lattanzio, 62, of Montclair, was sentenced to three years of supervised release and ordered to pay restitution of $3.93 million, the U.S. Attorney’s Office (New Jersey) stated.

Lattanzio was convicted in February on two counts of wire fraud and two counts of securities fraud following a three-week trial. Authorities previously seized Lattanzio’s 2013 BMW 650 and “various pieces of jewelry,” and were also seeking forfeiture of the home he purchased in Montclair, prosecutors said.

• See related article: Montclair Hedge Fund Owner Guilty; Scammed Investors For $4M

According to prosecutors:

“From June 2013 through November 2014, Lattanzio orchestrated a large-scale scheme through which he, his hedge fund, the Black Diamond Capital Appreciation Fund L.P. (BD Fund), and several other related entities collected millions of dollars in upfront fees from two unsuspecting corporate investors in exchange for the promise of future loans or investment opportunities that did not materialize. Instead of investing the victims’ money as promised, Lattanzio stole the majority of the funds and used them to pay himself more than $500,000 in salary. He used the money for numerous personal expenses, including the purchase of a $1 million home in Montclair, a new Range Rover, a $10,000 diamond ring, and the payment of $500,000 in credit card debt that he incurred for other personal expenses. Lattanzio lied to the victims about the status of their funds to conceal the scheme and mislead them into believing that their investments were safe.”

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