A U.S. unit of one of the world’s largest insurers will plead guilty to years-long investment fund fraud, valued at billions of dollars, that affected New York City bus and subway drivers , among others.
The guilty plea of Allianz Global Investors U.S. LLC (AGI US)a wholly owned subsidiary of the German insurer Allianz SEincludes $6 billion in forfeiture, restitution, and fines.
According to a Statement of Facts that AGI US accepted as part of the plea deal, the company engaged in a plan for at least six years to underestimate the risk being taken by its Alpha Structured Funds, exaggerate the level of oversight of those taking the risk, and hide information about the risk.
When the markets tanked at the start of the pandemic in March 2020, investors lost billions of dollars in funds.
The Manhattan US Attorney’s Office said the fraud affected several NYC Transit employees through their pension fund investments in Structured Alpha funds.
Concurrent with the plea agreement, federal prosecutors also unsealed an indictment against Gregoire Tournant, the funds’ former chief investment officer, charging him with conspiracy, fraud and obstruction of justice.
Two of his colleagues, Trevor Taylor and Stephen Bond-Nelson, agreed in early March to plead guilty to a variety of charges, according to documents unsealed Tuesday.
This is a developing story.
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