Hedge Fund Duped By Jack Abramoff

Crain's Chicago Business reports:

Before admitting to crimes related to his lobbying practice, Washington, D.C., power broker Jack Abramoff duped Chicago's largest hedge fund in a scheme involving offshore gambling and a sandwich mogul who was later murdered.

In September 2000, a division of Citadel Investment Group LLC loaned $32.5 million to Mr. Abramoff and a partner to help them buy a fleet of 11 gambling boats in Florida, according to court filings.

Mr. Abramoff and the partner told Citadel they were buying the boat company, SunCruz Casinos LLC, for $148.5 million and would put up $23 million in cash as a down payment, court documents say. Citadel and lead lender Wells Fargo Foothill, which chipped in $27.5 million, loaned the men a total of $60 million. The rest of the price was financed by the seller, Greek immigrant Konstantinos "Gus" Boulis, who made a fortune in two submarine sandwich chains.

But a few months later, Citadel discovered that Mr. Abramoff and his partner, Adam Kidan, had faked the $23-million down payment.

"The copy of the wire funds transfer was fraudulent," the U.S. attorney's office in Miami said in a statement. "The buyers never made any cash contributions toward the purchase of SunCruz."

Jack Abramoff must feel everyone has a price.A Washington D.C. kind of guy.