Infinity Q founder seeks to undo guilty plea ahead of fraud sentencing
By Jody Godoy
(Reuters) -The founder of Infinity Q Management, the New York firm which once claimed to manage $3 billion, said he did not lie to investors and asked to withdraw his guilty plea ahead of his sentencing next week.
James Velissaris, who pleaded guilty to securities fraud in November, said in court papers filed late Friday that he is innocent because his firm had disclosed to investors that it may value assets differently than an independent pricing service it used.
At his plea hearing, Velissaris said he had committed fraud by concealing from investors that he adjusted the valuations.
Velissaris also said that he suffers from mental illness and had "felt hopeless and overwhelmed by pressure from both prosecutors and his prior counsel to accept a plea deal" at the time.
A spokesperson for the U.S. Attorney's Office for the Southern District of New York declined to comment. Velissaris' current and former lawyers did not immediately respond to requests for comment.
U.S. District Judge Denise Cote is scheduled to sentence Velissaris on April 7.
Prosecutors said Velissaris misled investors and regulators by promising to fairly value over-the-counter derivative positions that comprised much of a mutual fund and hedge fund he ran and which purportedly contained $3 billion of assets.
Velissaris instead mismarked many holdings, sometimes inflating their values to "impossible" levels, and concealed the mismarking from auditors by falsifying term sheets, prosecutors said.
The purpose of the scheme was to increase management fees and retain investors, they said.
The case is U.S. v. Velissaris, U.S. District Court, Southern District of New York, No. 22-00105.
Reporting by Jody Godoy in New York
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