By ERIN ROLL
A Montclair hedge fund owner has been sentenced to six years in prison for defrauding two investors of $4 million.
Nicholas Lattanzio, 62, was sentenced Thursday in federal court in Newark, according to an announcement from the Justice Department. He had been convicted in February on two counts each of wire fraud and securities fraud. The charges stem from allegations that Lattanzio had taken $4 million in investments and spent it on a series of expensive purchases for himself instead of investing it for his clients. The sentence was handed down by U.S. District Judge Kevin McNulty.
Lattanzio had been the owner of the Black Diamond Capital Appreciation Fund. According to court documents, from June 2013 to November 2014, Lattanzio, his hedge fund and several related entities collected millions of dollars in upfront fees from two investors, with the promise of future loans and other investment opportunities.
Lattanzio was arrested in June 2015.
Lattanzio has also been sentenced to three years of supervised release and must pay restitution of $3.93 million.
Lattanzio allegedly used the money to pay himself a $500,000 salary and pay off $500,000 in credit card debt. He also used the money to buy a $1 million house in Montclair, a Range Rover and a $10,000 diamond ring. Other purchases, according to an announcement from the DOJ at the time of his arrest, included $24,000 for a family trip to Hawaii, more than $50,000 for tickets for the New York Yankees and thousands of dollars in clothes, restaurants, jewelry and furniture.