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Seized property turned over to feds
Hedge fund manager forfeits vehicles, artwork
Updated: August 21, 2010, 10:57 PM
A Hummer, a Corvette, a Mercedes Benz and a $100,000 Land Rover are among the vehicles turned over to the federal government this week as part of an investigation into a 23- year-old hedge fund manager.
U. S. District Judge Richard J. Arcara also ordered the forfeiture of seven flat screen televisions and 15 paintings and sculptures, including two works by renowned artists Frank DiVita and Michael Flohr valued at a combined $23,000.
The property was seized last year as part of an FBI investigation into Michael Wilson, the former Cleveland businessman who stunned the local real estate community when he paid $6.3 million for two Hamburg mansions.
U. S Attorney William J. Hochul Jr. said the seized property was purchased with investor funds that were supposed to be invested in high-yield financial products.
Hochul said the forfeiture means Wilson’s assets can now be sold with the intention of returning the proceeds to his victims.
“There can be no better use of federal forfeiture laws than to strip wrongdoers of their illegal proceeds and return them to innocent victims who were defrauded,” he said.
The cars and artwork were taken from Wilson’s mother, Rosemary, and from David Smith, who served as chief operating officer of New Frontier Holdings, one of Wilson’s companies.
The government claims the Corvette, valued at $41,000, was a birthday gift from Wilson to Smith.
Wilson first gained attention in 2008 when he paid the highest prices ever for homes in Western New York.
He made the purchases — 6523 Boston State Road and 6553 Boston State Road in Hamburg—anonymously, through a company called Phantom One Holdings.
Shortly after the company bought the homes, federal agents raided them, seizing documents and computer equipment.
To buy the homes, Wilson obtained two mortgages from the previous owner but later defaulted on them.
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