Alternative Fund Manager Faces SEC Case, Criminal Charges Alleging $16M Fraud Involving Fake Loans and GL Beyond Income Fund

The U.S. Securities and Exchange Commission has filed a civil case against alternative fund manager Daniel Thibeault accusing him of taking some $16 million in assets from the GL Beyond Income Fund (GLBFX). Thibeault was arrested on securities fraud charges over the same matter last month.

According to the SEC, Thibeault took out faked loans using Taft Financial Services, which is an intermediary that he allegedly controlled, to steal money from the funds. The purported securities scam is said to have begun in 2013, after the GL fund started losing money. The Commission says that in certain cases documents for the loans that were withdrawn via Taft are missing or had errors in them, including inaccurate birth dates for borrowers.

The regulator’s complaint also names GL Investment Services, which Thibeault indirectly owns. The registered investment adviser, which had about $130 million in assets from approximately 700 clients, is accused of advising customers to put money in the GL fund.

The SEC wants disgorgement, civil penalties, and ill-gotten gains. It also has named Thibeault’s wife Shawnet, who is has part ownership in GL. The Commission says that Shawnet benefited when GL took fund money to pay $20,000 on her husband’s credit card.

GL Beyond Income Fund is a mutual fund that claims to invest in consumer loans to individuals that it thinks are not as susceptible as most people to economic turmoil: dentists, doctors, lawyers, business owners, and others. In January 2014, the Fund reported that it had about $31 million of net assets.

According to prosecutors, Thibeault compelled the Fund to acquire or put out a number of fake loans to people that never asked for one and ultimately didn’t receive a loan. He also is accused of falsifying or causing the falsification of documents regarding these fake loans.

If convicted, he could end up serving up to twenty years behind bars pay a $5 million fine.

Alternative Funds
“Alt fund” refers to mutual funds that employ strategies usually used for hedge funds. The approach is meant to incur positive returns when the market is down or flat.

The GL Beyond Income fund is a “non-traditional fixed income” fund that holds high-yield personal/consumer loans with variable rates. That this fund happens to be an interval fund means that typically investors may only exit out at certain points in time and even then only a limited amout of holdings can be redeemed at once.

If you suspect your losses are because of securities fraud do not hesitate to contact our securities lawyers right away. The SSEK Partners Group represents high net worth individuals and institutional investors.

Harvard-Trained Mutual Fund Manager Charged with Securities Fraud, FBI, December 12, 2014

SEC sues alts fund manager Daniel Thibeault for fraud, InvestmentNews, January 9, 2015

Fraud charge exposes the wild world of ‘alternative’ funds, MarketWatch, December 22, 2014

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