- 1Brendan Ross was sentenced to 40 months in prison after pleading guilty to wire fraud.
- 2He was indicted in 2020 over a scheme at Direct Lending Investments.
- 3The indictment alleged fund asset values were inflated by over $300 million across about four years.
Brendan Ross, a hedge fund manager who was once a big name in alternative small business lending, received a 40-month prison sentence after he pleaded guilty to wire fraud.
The case
Ross was indicted in 2020, five years ago, over a scheme carried out through his firm, Direct Lending Investments. According to the indictment, Ross caused the monthly asset values of the funds to be cumulatively inflated by more than $300 million over about four years. That inflation let him collect millions of dollars in fees he otherwise could not have charged clients, the indictment said.
Early warning signs
Clues to the scheme surfaced earlier, in a 2017 book by an entrepreneur who had borrowed from Ross's fund. When the author told Ross his lending business was failing, Ross reportedly replied that he felt he was staring over the edge and that his life was over.
Ross later resigned from his own firm, and the company went into receivership.
Source reporting: deBanked.
