PE Firm Founder Pleads Guilty To Stealing Money From Kentucky Pension, Other Investors


A private equity manager who stole millions from his investors, including the Kentucky Retirement Systems, (KRS) pled guilty to grand larceny charges on Monday.

Lawrence Penn III was the founder and managing director of the Camelot Group.

But Penn, along with a partner, spent years siphoning off nearly $10 million of investor money to buy jewelry and other luxury items.

Among the affected investors was the Kentucky Retirement Systems, who invested $24 million with the firm, according to the Lexington Herald-Leader.

More on Penn’s guilty plea, from the New York Post:

West Point grad Lawrence Penn III copped to grand larceny and falsifying business records in exchange for 2 to 6 years in prison. He must also make restitution of $8.3 million and relinquish his company’s interest in the fund.

Justice Laura Ward offered the deal over the objections of prosecutors. Assistant District Attorney Chevon Walker recommended 4 to 12 years in prison. He’s already served more than a year of his sentence.

Penn allegedly siphoned cash from Camelot Acquisitions to a shell company set up by his pal Michael Ewers – who also pleaded guilty for his role in the scheme that ran from 2010 to 2013.

The diverted cash was made to look like payments for Ewer’s services but actually served as a front, prosecutors said.

Penn, 45, allegedly used the stolen loot for credit card payments, cash withdrawals, luxurious office space, rent for two apartments, jewelry and even a fancy car.

The whole situation has been used as an argument against the use of placement agents as intermediaries between pension funds and investment firms. From the Lexington Herald-Leader:

State audits revealed that The Camelot Group paid $780,000 in fees to placement agent Glen Sergeon of New York to get the KRS commitment in 2009, [former KRS Trustee Chris] Tobe said.

“They were getting $26 million of our money to do whatever they wanted with for four years, so it was a good deal for them, if not for us,” Tobe said. “For us, basically we were convinced to seed a start-up firm with no track record, and now it’s falling apart.”

The SEC originally brought charges against Camelot in early 2014.

Share This Post

Recent Articles

Leave a Reply

Privacy Policy | © 2020 Pension360 and © 2014 Policy Data Institute | Site Admin · Entries RSS ·