The Wall Street Journal reported that Platinum’s investors were focused in the observant Jewish community. Nordlicht and his wife Dahlia Kalter-Nordlicht are active members of Young Israel of New Rochelle, both are board members of the Westchester Torah Academy located in New Rochelle, NY and endowed The Fred Kahane Technological High School, an Americans for Israel and Torah (AMIT) school in Ashkelon Israel.
Three of those arrested attended Yeshiva University, according to The Commentator, the school’s official student newspaper, Mark (Meir) Nordlicht graduated from Yeshiva University in 1990 with a bachelor’s in philosophy. Uri Landesman attended Yeshiva University in the 1980s. David Levy graduated from Yeshiva University in 2006.
According to news reports, Mark Nordlicht was considering taking out a second $7.5M mortgage on his home.
As the New York City-based hedge fund began to go under in December 2015, Nordlicht wrote that he was thinking about using $7.5 million from a second mortgage on his home to try to keep it afloat, the papers say. He also was considering fleeing the country, they say.
That property could not have been his primary residence in New Rochelle which is estimated to be worth about $1.5 million and is held in a trust. As Platinum Partners faltered, some time between 2012 and 2016, the property at 245 Trenor Avenue was transferred from Dahlia Kalter, Nordlicht’s wife and a past employee of Platinum Partners, to Kalter Gilad Cook Islands Trust Limited.
The property may have instead been one in Florida owned by OBH 2308 LLC, a limited liability company which owns 10295 Collins Ave Unit 2308 at One Bal Harbour Ritz Carlton. The 5,266 square foot apartment, with 4 bedrooms and 5 bathrooms overlooking the ocean, is currently listed for sale at $9,995,000, The realtor describes the property as “the largest unit for sale in the building”.
The Principal of OBH 2308 LLC is Dahlia Kalter.
Nordlicht, Levy, Landesman, SanFilippo and Mann are charged with securities fraud, investment adviser fraud, securities fraud conspiracy, investment adviser fraud conspiracy and wire fraud conspiracy for defrauding investors through, among other things, the overvaluation of their largest assets, the concealment of severe cash flow problems at Platinum’s signature fund, and the preferential payment of redemptions. Nordlicht, Levy, Small and Shulse are charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy for defrauding Black Elk’s independent bondholders through a fraudulent offering document and diverting more than $95 million in proceeds to Platinum by falsely representing in the offering document that Platinum controlled approximately $18 million of the bonds when, in fact, Platinum controlled more than $98 million of the bonds.
Nordlicht, Levy, Landesman, SanFilippo, Mann, Small and Shulse will be arraigned later today before United States Magistrate Judge Lois Bloom at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York. Shulse’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 515 Rusk Avenue, Houston, Texas.
The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Philip Bartlett, Inspector-in-Charge, United States Postal Inspection Service, New York Division (USPIS).
“As alleged, Nordlicht and his cohorts engaged in one of the largest and most brazen investment frauds perpetrated on the investing public, earning Platinum more than $100 million in fees during the charged conspiracy. Platinum Partners purported to be a standard bearer in the hedge fund industry, reporting annual average returns of more than 17 percent since inception in 2003. In reality, their returns were the result of the overvaluation of their largest assets, which eventually led to Nordlicht and his co-conspirators operating Platinum like a Ponzi scheme, where they used loans and new investor funds to pay off existing investors,” stated United States Attorney Capers. “The charges and arrests announced today reflect our steadfast commitment to holding accountable hedge funds on Wall Street who rip off investors for personal gain.” Mr. Capers thanked the Securities and Exchange Commission, New York Regional Office (SEC) for their significant cooperation and assistance during the investigation.