NEW HAVEN, Conn. — Federal prosecutors want a Venezuelan-American financier to hand over a large tax refund while he awaits sentencing in a massive Connecticut-based fraud scheme, saying he misused an earlier refund and faces paying restitution that could be hundreds of millions of dollars.
Prosecutors say they believe the refund check to Francisco Illarramendi and his wife is for more than $2 million and want it deposited with the court pending his sentencing in September. Illarramendi pleaded guilty in 2011 to several counts of fraud and conspiracy to obstruct justice in a scheme to conceal huge losses.
Illarramendi ran unregistered hedge funds out of offices in Stamford. His biggest client was a pension fund for state oil workers in Venezuela. Prosecutors say Illarramendi transferred money among investment accounts without telling clients, falsified documents to deceive investors and used money provided by new investors to pay out returns he promised to earlier investors.
Illarramendi had been under house arrest in New Canaan since entering the guilty plea, but a judge ordered him detained in January. The sentencing had been postponed several times as Illarramendi changed attorneys.