New York money manager Chimay accused of fraud arrested in North Carolina

Money manager arrested, accused of fraud

WASHINGTON — Authorities arrested Friday a money manager accused of defrauding people by promoting investments he claimed were linked to the royal Chimay family of Belgium.

Guy Albert de Chimay was arrested in Wrightsville Beach, N.C., after a New York City grand jury indicted him on grand larceny and forgery charges, said Adam Kaufmann, who heads the Manhattan district attorney’s investigative division.

At the same time, the Securities and Exchange Commission filed civil fraud charges against Chimay and his New York-based firm, Chimay Capital Management Inc. The SEC said it won a court order Friday freezing Chimay’s assets and those of the investment firm. In a civil lawsuit, the SEC said Chimay siphoned millions from investors in his so-called bridge-loan facility to pay his divorce lawyers and the mortgage on his multimillion-dollar home in the Hamptons on New York’s Long Island.

Chimay, 47, a U.S. citizen living in Manhattan, is accused of diverting $6 million or more from investors for his personal use in a scheme starting in 2008. Chimay claimed that his firm was the U.S. investment arm of the royal family and that he himself was related to the current head of the family, the Prince de Chimay, according to the SEC.

The SEC is seeking unspecified fines and restitution of Chimay’s allegedly illegal profit. Kaufmann declined to elaborate on the Manhattan district attorney’s charges.

Chimay doesn’t have an attorney representing him in the case, the SEC said. The telephone number listed for the office of Chimay Capital Management was disconnected; Chimay’s home numbers are unlisted.

In its suit filed in federal court in Manhattan, the SEC alleged that Chimay promoted investments in the so-called bridge-loan facility, portrayed as pooling investors’ funds with millions from the Chimay family to make profitable short-term loans to companies. The investment was being offered only to a select few people outside of the family’s circle, Chimay is said to have told prospective investors, promising annual returns of 12 percent.

Chimay simply stole the money and falsified bank statements to conceal the fraud, the agency said.

“Chimay used the trappings of royalty to perpetrate the most common of frauds,” George Canellos, the director of the SEC’s regional office in New York, said in a statement. “Chimay blatantly lied to investors about nonexistent investments and then used their money to bankroll his exorbitant personal and business debts.”

Chimay used investors’ money for his mortgage payments and big credit card bills and to pay more than $500,000 to his divorce lawyers, the SEC said. Money also went to pay off disgruntled partners in Chimay’s other business ventures, the agency said.

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Associated Press writer Jennifer Peltz in New York contributed to this report.