Andrey C. Hicks, owner of Locust Offshore Management LLC. has been indicted
on federal fraud charges in connection to an alleged $2.5 million investment
scheme involving a purportedly billion-dollar
hedge fund, Locust Offshore Fund, Ltd (Locust Fund). Authorities say at least nine
individual investors and two companies were defrauded in the scheme.
Hicks is accused of luring investors to invest in his hedge fund scheme
by misrepresenting his experience, his background, and the specifics of
the hedge fund. In particular, the indictment alleges that Hicks told
investors that he held undergraduate and graduate degrees from Harvard
University, and that he had experience managing billions of dollars in
assets for Barclays Capital. He allegedly also told investors that Locust
Fund managed over a billion dollars in customer assets, and earned nearly
80 percent profit in 2011.
According to the indictment, none of Hicks’ statements was true.
Hicks is further accused of misappropriating the vast majority of investor
funds and using the money for his personal purposes. The SEC filed similar
charges against Hicks and his companies in October. A federal judge subsequently
ordered a temporary freeze on Hicks’ assets, as well as the assets
of his firm and of Locust Fund. If convicted, Hicks could serve up to
20 years in prison.