Hedge Fund Manager Aleksander Efrosman Pleads Guilty to Forex Fraud

Aleksander Efrosman, the fund manager who fled the U.S. after being accused of swindling clients, admitted to running a scheme to cheat investors out of $5 million, including $3 million he spent at a casino.

Efrosman, 50, pleaded guilty today to wire fraud before U.S. District Judge Nicholas Garaufis in Brooklyn, New York, prosecutors said in an e-mailed statement. Efrosman, who controlled foreign-currency hedge funds Century Maxim Fund Inc. and AJR Capital Inc., had faced mail-fraud, wire-fraud and money-laundering charges.

A U.S. citizen, Efrosman was indicted in 2006 after fleeing in 2005. He traveled to Mexico, Panama and Poland, where he assumed the identity of Mikhail Grosman using a fraudulent Russian passport, said U.S. Attorney Loretta Lynch in Brooklyn in the statement. He was arrested in Poland in May 2011 and extradited to the U.S. in August.
Efrosman stole from more than 100 clients who gave him $5 million in 2004 and 2005 to invest, prosecutors said. He gambled more than $3 million at the Foxwoods Resort Casino in Connecticut, according to prosecutors.

Stop-Loss Claim

He told the investors he would invest their money in the stock market and foreign currency exchange market, according to prosecutors. He falsely said that he had a history of profitable trading and that he would use a “stop-loss” mechanism to ensure that no trade would lose more than 3 percent, the government said.

Michael Schneider, an attorney for Efrosman, didn’t immediately respond to a voice-mail message seeking comment on the plea. The plea couldn’t immediately be confirmed through electronic court records.

Formerly of Staten Island, New York, Efrosman fled the U.S. while on supervised release after leaving prison in April 2003 for a conviction in a foreign-exchange scheme, according to prosecutors. He pleaded guilty in that case after being extradited from France.


Efrosman ran a third investment scheme while in Panama, where he was joined by his wife and children, according to an August letter from Assistant U.S. Attorney Daniel A. Spector to U.S. Magistrate Judge Andrew L. Carter.

The case is U.S. v. Efrosman, 06-cr-95, U.S. District Court, Eastern District of New York (Brooklyn).