Orlando, Florida - Chief U.S. District Judge Anne C. Conway today sentenced Philip Leon (68, Altamonte Springs) and John G. Wilkins (54, Chuluota) to 9 years in federal prison, respectively. The sentences were handed down in connection with their roles in a conspiracy to commit mail fraud and wire fraud. In addition, Leon and Wilkins were ordered to pay over $17 million in restitution to more than 200 victims, and to forfeit over $4 million in artwork and monies that are being held in various banks and trading accounts, which will be returned as partial payment to victims.
Leon pleaded guilty on November 6, 2013. Wilkins pleaded guilty to the charges against him on Aug. 22, 2013.
According to court documents, Altamont Global Partners, LLC owned or managed a series of investment funds. Leon registered Altamont Global with the Florida Secretary of State in March 2009 and was a managing member of the company. Wilkins joined Altamont Global in 2009, later becoming one of its managing members.
The Matterhorn Fund, LLC was the first fund for which investors were solicited by Altamont Global, with Leon serving as the fund’s manager. To induce individuals to invest, Leon, Wilkins, and others falsely represented that the Matterhorn Fund had a long history of making profits, that Leon was a graduate of Stanford University, that he worked for Salomon Brothers as an institutional investment advisor, and that he had successfully traded worldwide investment vehicles for over three decades. None of those representations were true.
In the first quarter of 2010, the Matterhorn Fund experienced significant trading losses. Rather than accurately reflect those losses on the quarterly statements, Leon and Wilkins decided to falsify the quarterly statements and to falsely claim that the Matterhorn Fund was earning an above-market rate of return. The false rates of returns that were claimed for the Matterhorn Fund were then used to induce individuals to invest in the McKinley Fund. The McKinley Fund also lost money, and Leon and Wilkins decided to falsify the quarterly statements for that fund. The conspirators then used their alleged performance with the Matterhorn and McKinley Funds to solicit investments in two other funds: Midas Management Partners, LLC and Binary Strategy One Fund, LLC. In total, over 200 individuals invested more than $17 million in the four funds owned or managed by Altamont Global.
In June 2012, the National Futures Association (NFA) conducted a surprise examination of Altamont Global. During that examination, the NFA discovered that the quarterly statements were being falsified to hide losses and that the net asset values of the Matterhorn Fund and the McKinley Fund were being inflated to make it appear that trading had been successful.
On July 16, 2012, the U.S. Commodity Futures Trading Commission filed a complaint against Leon, Wilkins, and others. The District Court entered an emergency order that same day, freezing the assets of the defendants in that civil case.
These cases were investigated by the United States Secret Service and the State of Florida, Office of Financial Regulation. They were prosecuted by Assistant United States Attorney Roger B. Handberg.
Source: U.S. Department of Justice, Office of the United States Attorneys
