New details on limo driver in hedge fund fraud

Dial Car Inc. is one of New York’s biggest limousine services, with a fleet of 600 black cars. It was also the place where one of the most unusual Wall Street fraudsters to surface in many years worked.

Alan Fishman was a driver at Dial and a member of its board of directors between 2000 and 2009, according to court records, when he was arrested as part of a fraud investigation. Prosecutors say a hedge fund that Mr. Fishman started with a relative had cheated about 70 investment clients out of $20 million. In March, Mr. Fishman, 50, pleaded guilty to a conspiracy charge and faces between 37 and 46 months in prison. He will be sentenced on June 18.

Documents filed by Mr. Fishman’s lawyer last week present a much fuller picture of the former limousine driver than previously known. They reveal a story of an immigrant’s struggle that took a tragically wrong turn as Mr. Fishman got into Wall Street so he could get off what he called his “road to nowhere.” Mr. Fishman was subject of a story in Crain’s on July 12, 2009.

“What began admirably, ended quite dishonorably,” Mr. Fishman’s lawyer, Don Savatta, wrote last week in a letter to federal judge Denise Cote, in which he asked for leniency for his client. Mr. Savatta didn’t return a call Monday seeking comment.

The court documents describe Mr. Fishman as a native of Kiev who emigrated to the U.S. at age 15 in 1974 with his family. His father, the coach of the Ukrainian national wrestling team, had been denied permission to travel to a tournament in West Germany because Soviet authorities didn’t want a Jewish person to represent the nation. The Fishmans eventually settled in Philadelphia, where the father worked as an aerobics instructor at the city’s Four Seasons Hotel.

As a teenager, Mr. Fishman did well both at school and wrestling, earning a wrestling scholarship from Temple University, according to the court documents. He even hoped to represent the U.S. at the 1980 Olympics in Moscow. That dream was crushed, however, when the Carter administration boycotted the Olympics to protest the Soviet invasion of Afghanistan.

That setback, along with some injuries, ended his wrestling aspirations. After graduating from Temple in 1983 with a bachelor’s degree, Mr. Fishman worked briefly at a jewelry store, then got married and moved to Staten Island, where he started a family and in 1985 began work as a limousine driver.

His job required he get up before dawn and shuttle investment bankers around to meetings or airports. He often worked the overnight shift. Around 2000, he was elected to the board of Dial Car, one of the biggest black-car services for Wall Street banks and law firms.

“He was a popular guy among the other drivers,” recalls Michael Kordonsky, president of Dial Car.

Mr. Kordonsky says that Dial removed Mr. Fishman from the board upon his arrest in 2009. He adds that Dial wasn’t aware of Mr. Fishman’s hedge fund sideline. “It was a complete surprise to us,” he said.

About the time he joined the Dial board, Mr. Fishman began spending more time with Gary Gelman, who is the son of Mr. Fishman’s sister-in-law and was known within the family for having worked on Wall Street in some capacity. The two men had known each other for years, but got close only when Mr. Fishman’s wife began serving as grandmother to Mr. Gelman’s newborn child; Mr. Gelman’s own mother struggled with psychiatric problems and stints in the hospital, according to the court documents.

Around 2001, Mr. Gelman suggested to Mr. Fishman that they launch a hedge fund. The investment strategy was to deposit money from U.S. investors into Ukrainian banks that were paying interest rates of about 12%. Mr. Fishman liked the idea of getting out of the black-car business and helping Mr. Gelman, who the court documents describe as a problem gambler.

“[My father] thought that stable employment and a good business would solve Gary’s gambling addiction and personal debt,” Mr. Fishman’s daughter wrote in a letter to the court. “My father was wrong.”

The hedge fund, called the AR Capital Global Fund, launched in 2003. Mr. Fishman’s lawyer says his client was responsible primarily for administrative and bookkeeping tasks, although Mr. Fishman told federal investigators that he had primary responsibility for investment decisions.

In any case, prospective investors were told the fund would buy shares in overseas real estate companies and would trade currencies, oil, gas and other commodities while using “active, leveraged trading” and “fundamental and technical analysis” to make money. Some 70 people from around the country wired money to the fund.

In fact, federal prosecutors say, client money was invested in three Ukrainian stocks or parked in a Ukrainian money market fund. Investors, many of whom were senior citizens, got worried when their account balances started to show unexplained changes. They tried to withdraw cash but were unable to do so. Virtually all the customers’ money vanished in 2006. Shortly before the money disappeared, Mr. Fishman sold his interest in the hedge fund.

Mr. Fishman is sorry for what he did, says his attorney. “He does regret, and is ashamed, that he did not have the discipline and the courage to prevent the misrepresentations made to potential investors,” Mr. Savatta wrote.

Mr. Gelman, who was also charged by prosecutors, is a fugitive.

For all his professional difficulties, relatives say Mr. Fishman is the glue who keeps the family together. Of course, his elderly parents are devastated.

“After having numerous conversations with Alan, I understood that sometimes meaning to do good and not understanding laws and outcomes of involvement, this tragedy happened with my son,” Mr. Fishman’s 74-year-old mother wrote to the court. “Dear Judge, what I want to ask you is that you could find some leniency for my boy.”

Related Topics: Fraud Charge Tracker