U.S. District Judge for the Southern District of Florida, Robert N. Scola Jr., convicted David C. Coggins, a 42-year-old hedge fund manager, to 51 months in prison for embezzling over $2 million from a dozen clients through his fund Coral Gables Asset Management LLC.
The SEC Alleges That Coggins Has Stolen At Least $1.85M From Clients Since 2015
According to the records, the judge convicted Mr. Coggins after hearing from victims that he had shown little remorse for deceiving them out of millions of dollars.
Nonetheless, the order is on the lower end of the advisory guidelines range of 51 to 63 months, which prosecutors had advised as a proper sentence for Mr. Coggins.
At the remote sentencing, conducted over Zoom, prosecutor Emily Scruggs described the accused as "endearing" and "charming." She also described Mr. Coggins as someone who used his appeal to persuade people, making him a "dangerous man."
Coggins Sold Limited Partnerships In The Fund By Deceiving Investors
Heather Schwartz, a former co-worker and friend of Mr. Coggins' who lost $100,000 in the fund, explained she gave the hedge fund manager numerous opportunities to come clean, but he never did.
The U.S. Securities and Exchange Commission (SEC) froze Mr. Coggins' assets on August 25, alleging he had stolen at least $1.85 million from clients since 2015.
Authorities also stated that Mr. Coggins sold investors limited partnership interests in the fund, misrepresented their performance, lied about his investment plan, sent fake audit opinions to clients, and forged brokerage records and investor account statements.
Mr. Coggins' lawyer, Andrew Jacobs, pushed for a split sentence of 12 months in prison and 12 months of home confinement to ensure his client could get back to work and pay the $1.3 million in restitution he owes.
He emphasized that restitution is usually a formality and that most offenders never repay the total amount. But tha, Mr. Coggins had a good shot at actually paying restitution to his victims due to his vast financial experience and track record within the industry.
Mr. Jacobs added that the crime occurred during the "worst years of Mr. Coggins' life" due to work, personal, and family troubles. Explaining that Mr. Jacobs' life was falling apart and that he lied about the hedge fund to cover his problems.
Mr. Coggins is set to begin his prison sentence in July, a few weeks after his fiancée is expected to give birth to a baby.
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