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Jeffrey A. Martinovich Pleads Guilty to Count of Money Laundering

Jeffrey A. Martinovich, the former CEO of MICG Investment Management LLC, pleaded guilty to one count of money laundering on May 13, 2016. He entered the plea agreement in U.S. District Court in Norfolk, Virginia, admitting to the illegal cash transfer of a $100,000 payment to his trial attorney in 2013. In return, 12 other pending felony fraud charges were dismissed.

Martinovich was convicted of fraud for inflating the value of an underlying asset in order to solicit additional investments and pay himself more in fees in 2013.

Acting on behalf of the hedge fund MICG Venture Strategies LLC., Martinovich purchased two million shares of a privately traded solar energy company in 2007. Because the shares were privately traded, an independent valuation of the company’s worth was required, and during that valuation Martinovich and others fraudulently inflated its value.

This inflated valuation allowed Martinovich to persuade new investors to invest in MICG as well as calculate higher management fees to be paid to himself. When the solar company filed for bankruptcy, the investors suffered significant losses.

The Financial Industry Regulatory Authority (FINRA) expelled Martinovich and his firm for securities fraud, improperly using client money, and causing false statements to be sent to investors in 2011. Martinovich was convicted in 2013 on 17 fraud charges, including conspiracy to commit mail and wire fraud, 4 counts of wire fraud, 5 counts of mail fraud, and 7 counts of unlawful monetary transactions.

Meyer Wilson previously reported on Martinovich and MICG Investment Management.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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