NEW YORK (Reuters) – A founder of the New York hedge fund pleaded guilty to bankruptcy fraud on Wednesday for putting a competitor under pressure not to bid for assets of Neiman Marcus creditors, so that he could lower it price could buy, the U.S. Department of Justice said.
Daniel Kamensky, 48, of Roslyn, New York, filed his lawsuit before U.S. District Judge Denise Cote in Manhattan.
Kamensky was a principal at Marble Ridge Capital LP, an investment specialist with an emergency member who once managed $ 1.2 billion in assets.
Advocates for Kamensky did not immediately respond to requests for comment. Referring to a plea agreement, a Kamensky spokesman said that during his sentencing on May 7, the accused could face 12 to 18 months in prison under recommended federal guidelines.
Prosecutors said Kamensky last summer threatened to use his role as co-chair of a Neiman creditors’ committee to prevent an investment bank from offering 30 cents a share for securities he wanted to buy for 20 cents a share.
Kamensky also threatened not to do business with the bank unless it backed down, and after asking an employee there to lie about what happened, prosecutors said.
“Do you understand … I can go to jail,” prosecutors Kamensky said. “It’s going to the U.S. Attorney’s Office.”
U.S. Attorney Audrey Strauss said in a statement: “His fraud did indeed come to the U.S. Attorney’s office and has now been revealed in open court.”
Founded in Dallas in 1907, Neiman applied for Chapter 11 protection last May. The luxury retailer emerged four months later among new owners, including investment firms Pimco, Davidson Kempner Capital Management and Sixth Street Partners LLC.
A federal bankruptcy judge approved a settlement in December over Neiman’s own claims against Kamensky.
Kamensky was a partner at hedge fund firm Paulson & Co before founding Marble Ridge in 2015.
Marble Ridge announced that it would be liquidated in August last year after Kamensky’s behavior was scrutinized.
Reporting by Jonathan Stempel in New York; Additional reporting by Maria Chutchian and Nate Raymond; Edited by Bill Berkrot and Aurora Ellis