Landmark Tax Group

Former CFO Sentenced for Fraud

On June 6, 2012, in Newark, New Jersey, David Newmark, former chief financial officer of Columbus Hill Capital Management LP, an investment management firm based in Short Hills, New Jersey, was sentenced to 54 months in prison, three years of supervised release and ordered pay $10,442,379 in restitution. Newmark pleaded guilty to an indictment charging him with one count of wire fraud and one count of tax evasion. According to court documents and statements made in court, between February 2008 and March 2011, Newmark embezzled from his former employer by requesting checks and wire transfers from custodians of the investment management company accounts and diverting the funds to bank accounts he controlled. Newmark deposited the checks and wire transfers – including a single wire transfer of more than $2.4 million in April 2010 – into a bank account he set up with a name similar to his employer’s. The majority of the $10.4 million that Newmark embezzled came from the management company rather than investor funds. For tax year 2008, Newmark did not disclose to the IRS the more than $2.8 million he received from the fraudulent scheme, resulting in a tax loss to the United States of $1,012,441.

Source: IRS.gov

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