Hedge fund manager allegedly faked death to avoid redemptions

Kaja Whitehouse | USA TODAY

A New York hedge fund manager who was running an alleged fraud went to great lengths to avoid giving investors their money back, including telling an investor he had died of a heart attack, the authorities said Friday.

Moazzam "Mark" Malik, 33, stole close to $850,000 from 16 foreign and domestic investors starting in 2011, according to a Securities and Exchange Commission complaint released Friday.

Malik, a former New York Police Department traffic agent and security guard, was also criminally charged by New York Attorney General Eric Schneiderman, who accused Malik of stealing $250,000 from five investors.

Malik, who also allegedly used some of the money to find a spouse, is being held on $1 million bond over $1 million cash bail, the attorney general said.

According to both the SEC and the attorney general, Malik used brazen tactics to attract investors' cash, including lying to a national news outlet about his performance.

And when investors asked for their money back, Malik pulled tricks to keep the money, such as pretending he had died or comparing himself to a werewolf, the SEC said.

In March 2011 a Bloomberg report identified Malik as a rising fund manager, based on data provided by Malik, the SEC said. Later, Bloomberg reported that Malik's Seven Sages fund had a 92.73% return on investment for 2012, the SEC said.

In May 2013, BarclayHedge, a well-known hedge fund data tracker, awarded Malik a "gold star" for his fund based on similar his false claims about his performance, the SEC said.

Malik claimed his American Bridge Investment Group had $100 million in assets under management with offices at 40 Wall Street in downtown Manhattan.

Malik had multiple hedge funds, including Wall Street Creative Partners, Seven Sages Capital, American Bridge Investment Group and most recently, Wolf Hedge, the SEC said.

He raised as much as $840,000 through American Bridge Investment Group, but never held more than $90,177 in assets in the fund's trading account, the SEC said.

Indeed, rather than invest the money, he had a "lavish lifestyle" that included classes at Harvard, jewelry, travel and matchmaking services, the SEC said.

His personal expenses include $19,104 for jewelry, $6,100 in tuition to attend courses at the Harvard Extension School, and a subscription to a "matrimonial matching website," the SEC said.

When investors asked for their money back, Malik went to great lengths to avoid repayment.

For example, in September 2013, a fictitious employee named Courtney sent an e-mail to an investor who had been asking for his money back to report that they delay in returning the money was because Malik had died.

"Mr. Malik has been (sic) passed away with the heart attack after accident. We will dissolve the fund shortly," the e-mail said.

Several months later, Malik sought to intimidate an investor who was seeking his money back by comparing himself to a werewolf, according to the SEC.

Malik sent this investor an e-mail in February 2014 that contained a video of a werewolf movie along with Malik's comment "that's what I think I am." The SEC didn't specify which werewolf movie.

According to the SEC, Malik sent this e-mail as a threat, "indicating that Malik was as dangerous and threatening as a werewolf."

The e-mail was intended to deter the investor from his efforts to get his money back or

contacting the authorities, the SEC said.

Malik, who returned a total of $83,240 to investors, has continued to raise money up until recently, the SEC said. The SEC said he raised $100,000 as recently as last month.

And Courtney, the employee who alerted an investor to Malik's death, wasn't the only fake employee Malik created, the SEC said. He also created a fake investor relations contact named Amanda Ebert to communicate with some investors.

Malik sent e-mails from Amanda Ebert to investors with each e-mail including a photograph of a real person who actually had no relation to the fund, the SEC said.

His Wolf Hedge bank account had a balance of negative $310 as of Nov. 30, 2014, the SEC said.

Recently, a Twitter account tied to Malik's name and hedge fund tweeted that he is writing three books. He also boasted on Twitter of being "the youngest CEO of alternative asset management firm in the world."

"If I can do it you can do it too," he wrote.