Yasuna Murakami, 44, of Cambridge, was arrested at the Canadian border Saturday on a wire-fraud charge that could mean up to 20 years in federal prison, as he tried to re-enter the US, the US Attorney's office reports.
The charges come about 18 months after the Massachusetts Secretary of State's office sued Murakami over the heavy losses incurred by the funds he oversaw.
The feds say Murakami sucked millions of dollars out of three hedge funds he operated - MC2 Capital Partners Fund, MC2 Capital Value Fund, and MC2 Capital Canadian Opportunities Fund - and used them in part for "lavish personal expenses such as a luxury sports car, international travel, and payments to personal credit cards and high-end department stores." Murakami, a graduate of Suffolk University's Sawyer Business School, used new investments from clients to pay off some initial investors, the US Attorney's office says.
The state alleges he stole $15.3 million from 47 investors - an "almost total loss of investors' equity." His partner and his partner's family invested at least $2.6 million in the ventures, the state alleges.
The US Attorney's office adds:
As part of the fraud, it is also alleged that Murakami withheld material information regarding the management of the MC2 Canadian Opportunities Fund and provided investors with falsified account statements and tax documentation in an effort to lull them into believing their investments were safe.
In addition to the state suit and the federal criminal charge, the SEC today filed its own lawsuit against him.
State complaint against Murakami (3M PDF).