NEWPORT NEWS, Va. (WAVY) — A Newport News financial adviser was sentenced Thursday for money laundering and fraud.
50-year-old Jeffrey A. Martinovich will serve more than 13 years in prison and was also ordered to pay about $2.4 million in restitution to the victims of his fraud.
Court documents say Martinovich was the head of MICG, a broker-dealer in Newport News.
In 2013, Martinovich was convicted by a federal jury of charges related to his fraudulent inflation of assets in one of the hedge funds he managed as owner of MICG — the Venture Strategies fund.
After Martinovich was convicted, it came to light that, beginning in 2010, Martinovich wrongfully diverted the assets of another hedge fund he managed while at MICG (the Partners fund).
On September 30, 2013, Martinovich was sentenced to 140 months in prison for fraudulently manipulating the Venture Strategies fund, according to court documents.
Rather than making distributions to investors and satisfying redemption requests, Martinovich chose to use over $700,000 in investments in the Partners fund to pay for his living expenses and other things. Once he was arrested and charged in relation to the Venture Strategies fraud, Martinovich used money from the Partners fund to pay for his criminal legal defense, including payments to his defense attorney, expert witnesses, a jury selection consultant, and other litigation expenses.
Prosecutors say Martinovich also falsely represented to his attorney, and took other steps to conceal the money used for his defense came from. He was charged in connection to the Partners fund on July 15, 2015, and pleaded guilty on May 13, 2016.
The U.S. Court of Appeals denied Martinovich’s appeal and the case was remanded for resentencing. Martinovich was again sentenced Thursday to 140 months for the Venture Strategies fund fraud. He was also sentenced to 63 months in prison for the fraud related to the Partners fund, with 24 months running consecutive to the 140 months, bringing his total sentence to 164 months in prison.