New York (HedgeCo.net) - The trustee for failed hedge fund Petters Group, Douglas Kelley, has sued the Epsilon-Westford funds founded by Steve Stevanovic, according to Bloomberg. The bankruptcy trustee is seeking to recoup over $3.2 billion to cover the company’s debt, Bloomberg said, ”Seventeen funds affiliated with the financier’s Westford Investment Management LLC and Epsilon Investment Management LLC were named as defendants in the complaint filed by Kelley.” “We terminated our relationship with Petters a full 18 months before it became known that Petters was involved in fraudulent activity.” an attorney for the Epsilon-Westford funds said in a statement, “We did so because we elected to invest our capital in other enterprises, not because we believed or had cause to believe that the Petters enterprises were engaged in fraudulent activities.” Petters and his hedge fund, Petters Group Worldwide LLC was convicted in December 2000, of all 20 criminal counts, adding up to a $3.5 billion fraud. “The defendant’s fraud is staggering and unprecedented in size and impact on victims and the community,” prosecutors said of the case back in March of this year. The complaint alleges the defendants knew or should have known the investments were fraudulent, according to Reuters. “Stevanovich received millions in false profits through his active and direct involvement in the Petters Ponzi scheme.” Petters has stated that he plans to fight to be released from custody and maintains his innocence.

1. Update: Hedge Fund
Bankruptcy Trustee
Sues Investment Firms

2. New York (HedgeCo.net) - The trustee
for failed hedge fund Petters Group,
Douglas Kelley, has sued the Epsilon-
Westford funds founded by Steve
Stevanovic, according to Bloomberg.

3. The bankruptcy trustee is seeking to recoup over
$3.2 billion to cover the company’s debt,
Bloomberg said, ”Seventeen funds affiliated with
the financier’s Westford Investment Management
LLC and Epsilon Investment Management LLC
were named as defendants in the complaint filed
by Kelley.”

4. “We terminated our relationship with Petters a full
18 months before it became known that Petters was
involved in fraudulent activity.” an attorney for the
Epsilon-Westford funds said in a statement, “We did
so because we elected to invest our capital in other
enterprises, not because we believed or had cause
to believe that the Petters enterprises were engaged
in fraudulent activities.”

5. Petters and his hedge fund, Petters Group
Worldwide LLC was convicted in December 2000,
of all 20 criminal counts, adding up to a $3.5 billion
fraud.
“The defendant’s fraud is staggering and
unprecedented in size and impact on victims and
the community,” prosecutors said of the case back
in March of this year.

6. The complaint alleges the defendants knew or
should have known the investments were
fraudulent, according to Reuters. “Stevanovich
received millions in false profits through his active
and direct involvement in the Petters Ponzi
scheme.”
Petters has stated that he plans to fight to be
released from custody and maintains his
innocence.