Almost a month after he was
arrested on charges of securities fraud, alternative fund manager Daniel Thibeault is now facing related civil charges from the Securities and Exchange Commission.
The
SEC's complaint, which was filed in federal court in Massachusetts, echoes many of the same allegations made by the Federal Bureau of Investigation in the criminal case and accuses Mr. Thibeault of siphoning off some $16 million in assets from the GL Beyond Income Fund, of which he was portfolio manager. The fund, which invested mostly in individual consumer loans, had around $42.6 million in total assets as of Dec. 8, according to a daily valuation report, the SEC said.
Mr. Thibeault took out fictitious loans through an intermediary he allegedly controlled, Taft Financial Services, to divert money from the fund, according to the complaint.
In an interview, Mr. Thibeault said there was more to the story than had thus far been reported, but that he was not at liberty to elaborate given the investigation.
“What occurred here is pretty bizarre,” he said.
Mr. Thibeault's court hearing in the criminal case, which was scheduled for sometime this month, has been rescheduled to Feb. 11.
The alleged scheme, which began in 2013, started after GL began losing money, according to the complaint. Documentation for the loans taken out through Taft was in some cases either erroneous or missing, and some included incorrect dates of birth for the borrowers, according to the SEC's complaint.
“[Mr.] Thibeault began a scheme to use the fund's money to support his faltering financial advisory businesses,” the SEC said.
The complaint also names the registered investment adviser, GL Investment Services, which had around $130 million in assets from around 700 clients and allegedly directed clients to invested in the fund. Mr. Thibeault was an indirect owner of the RIA through GL.
The SEC is seeking civil penalties and disgorgement of the purportedly ill-gotten gains and has named his wife, Shawnet Thibeault, who was a part owner of GL, in the suit. The SEC said that she had received benefits as GL used money from the fund to pay $20,000 owed on an American Express card in Mr. Thibeault's name that had charges of “thousands of dollars per month at the iTunes Music Store, as well as several other purchases [at] home good stores, suggest[ing] that the card was used for personal expenses.”
