Fund manager arrested for $11 million Facebook scam

New York, Nov 18: John Mattera, a fund manager, who owns the Praetorian Global Fund registered in the British Virgin Islands has been accused of running a $11 million scam promoting phony access to coveted shares of Facebook and Groupon Inc before their public debut. He was arrested on criminal charges from his home in Florida by Internal Revenue Service Agents.

According to sources, Mattera, 50 used around $4 million for his personal luxury including buying expensive cars, jewelry, paying personal taxes and settling a private civil fraud lawsuit.

If he is convicted on charges involving false representations including those on Groupon, the daily deals website, social networking company Facebook, Mattera may face up to 20 years in prison.

The world's most popular social networking site, Facebook is being closely watched by investors as a potential candidate for an initial public offering next year. Groupon made its stock market debut on Nov. 4, closing up 31 percent on its first day of trading. On Thursday (Nov 17), the stock rose 0.9 percent to $24.25.

The court documents revealed that investors sent more than $11 million into what Mattera and others described as escrow accounts at a Florida bank. He is accused of telling investors that their money would be held until the IPO was completed. But instead, Mattera transferred most of the money into entities that he controlled with an associate.

OneIndia News