NEW HAVEN, Conn. — A man who fought drug trafficking in the Caribbean as a U.S. Navy officer before beginning a finance career in Connecticut was sentenced Tuesday to two years and nine months in prison for misleading investors about accounts in the Cayman Islands.
David Bryson, who was sentenced in New Haven federal court, is among three former executives of Ridgefield, Connecticut-based hedge fund New Stream Capital to plead guilty in a fraud prosecutors say caused losses of more than $46 million. Prosecutors say the defendants orchestrated a scheme to secretly keep an offshore fund open to prevent an investor from withdrawing funds.
Bryson, a graduate of the U.S. Naval Academy, pleaded guilty last May to a federal conspiracy charge.
Prosecutors sought a five-year sentence for Bryson, arguing in a court filing that he and two other defendants "devised and promoted a series of lies carefully calculated and designed to keep existing investors in the dark about the true risk of the fund and to deceptively raise millions of dollars in new investments in an effort to keep their fund viable."
Defense attorneys said the crime was out of character for Bryson, who served aboard a Navy destroyer for three years and led searches of vessels suspected of smuggling drugs.
"David is simply not the type of man one would ever expect to find convicted of this offense," his attorneys wrote. "He is a core member of his community and church, a dedicated family man, a hardworking and honest businessman and a proud Navy veteran."
In 2007, New Stream told foreign investors that a fund would be closing and they would have to move their investments into new funds in the Cayman Islands. At risk of losing their largest investor, the three defendants set in motion a scheme to secretly keep the fund open and give priority to certain investors, prosecutors said.
New Stream failed to inform investors who had transferred into the Cayman Islands fund that the existing fund was remaining open or that it was being given priority over the Cayman Islands fund, prosecutors said.
The others who pleaded guilty are Bart Gutekunst and Richard Pereira.