Wednesday, July 18, 2012

Hell Hath No Fury Like Racketeering Charges Filed in Hedge Fund Divorce



How angry an ex would you have to be to file racketeering charges against your spouse?  That’s a question Elizabeth Bingham-Perry could answer. The Scarsdale resident filed a civil RICO action against her husband Jeffrey Perry in the U.S. Southern District’s Westchester courthouse last week.  Mr. Perry, it so happens, is an executive at Third Point LLC, the hedge fund founded by Dan Loeb.

In the complaint, Ms. Bingham-Perry alleges that Mr. Perry lied on net worth statements submitted by mail in the divorce proceedings, concealing assets in excess of $1 million in offshore and other acounts. That’s just the start. Mr. Perry’s entire career, his wife alleges, “has been marked by repeated criminal activity in his quest to amass his fortune,” a claim she rests on Mr. Perry’s alleged participation in a scheme to drive down the share price of a Canadian company called Fairfax Financial.

Which is a pretty nasty thing to say about your husband of 23 years, and a crude but potentially useful cudgel for hammering out a settlement.

(A little background: RICO is the Racketeer Influenced Corrupt Organizations Act, passed by Congress in 1970 to allow the government to prosecute mafia godfathers for crimes committed by their organizations, but written broadly enough to apply to any person who uses an enterprise to engage in a continuous pattern of criminal activity.)


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