By Carol P. Bartold     

Mar. 30, 2016: Arrested on Saturday evening, March 26, at LaGuardia Airport, Bronxville homeowner Andrew Caspersen, a former partner in the firm PJT Partners Inc., appeared in federal court in Manhattan on Monday to face charges of securities fraud and wire fraud.

He was released, after a hearing, on a $5 million bond, secured by homes he owns in Bronxville and Manhattan, plus $50,000 in cash.

The Securities and Exchange Commission filed civil charges against Caspersen on Monday on the same charges.

Caspersen could receive a sentence of up to 40 years in prison and be liable for tens of millions of dollars in fines on the charges brought by the United States Attorney's Office in Manhattan.

According to a criminal complaint brought by the U.S. Attorney's Office, Caspersen, age 39 and a graduate of Princeton University and Harvard Law School, developed a scheme to defraud investors of $95 million. At the time of his arrest, Caspersen had stolen $25 million and had plans to obtain the additional $70 million.

The complaint further states that Caspersen created false email addresses, set up misleading domain names, and invented nonexistent financiers.

As managing principal of PJT Partners' Park Hill Group since 2013, Caspersen, who earned over $3 million annually, worked in private equity restructuring.

PJT Partners Inc. was formed in 2015 from Blackstone Group, a large private equity firm, and Park Hill Group, Blackstone's financial advisory services group.

The beginning of Caspersen's scheme can be traced back to June of 2015, when he was assigned to help the private equity firm Irving Place Capital raise $500 million to restructure a fund from 2006.

In October, he contacted an international hedge fund manager with responsibility for recommending investments on behalf of a charitable foundation affiliated with the hedge fund to seek a $24.6 million investment. Caspersen, according to the complaint, created a fake "credit facility," which he said was related to the Irving Place restructure and had been set up by PJT Partners Inc. to facilitate investments in the private equity secondary market. He promised high returns on investment and claimed that he had already received $30 million in investments.

Irving Place III SPV LLC, the account set up to receive the investment funds, actually had no relation to the Irving Place restructure. Caspersen controlled the account and, according to authorities, had deposited only $2.5 million of the $30 million he represented was already in the account.

In November, the charitable foundation wired $24.6 million to Caspersen along with $400,000 of the hedge fund manager's personal funds. Caspersen promised to invest the $25 million in a secured load to a private equity fund but instead used the money for personal options trades and to cover up an unauthorized wire transfer.

Caspersen allegedly deposited $17 million of the funds in his own brokerage account and lost $14.5 of it in November through trading short-term options on the Standard & Poor's 500 Index. He deposited the remaining $8 million invested to a company-controlled account to cover up an earlier unauthorized wire transfer at the firm.

In December, Caspersen transferred $9.45 million from his brokerage account to a personal account. Authorities have stated that those funds have not been accounted for.

Earlier this month, Caspersen sought an additional $20 million from the hedge fund as well as $50 million from another New York private equity firm.

In mid-March, the hedge fund investor demanded a return of the $25 million investment, which, although Caspersen promised would be returned by the end of the month, had not been returned at the time of his arrest.

PJT Partners Inc. has terminated Caspersen for cause. "We were … stunned and outraged to learn of the fraudulent circumvention and violation of the firm's compliance policies and ethical standards by Andrew Caspersen," the firm said in a March 28 press release. "Immediately upon learning of facts that suggested improper behavior, we commenced an internal investigation led by outside counsel … and very quickly thereafter, brought the matter to the attention of the U.S. Attorney's Office in Manhattan. Since that time we have cooperated fully with law enforcement, and we will continue to do so."

It is not known whether Caspersen was leaving or returning to New York when he was arrested at the airport.

Pictured here:  Property in Bronxville owned by Andrew Caspersen.

Photo by N. Bower