NYC fund manager pleads guilty to fraud

A Manhattan money manager has pleaded guilty to a charge of securities fraud related to a $4-million land development deal on Long Island, prosecutors said.

William Landberg, founder of West End Financial Advisors Llc, made the plea on Friday in U.S. District Court for the Southern District of New York in Manhattan.

The case against him included a total of $8.7 million of misspent investor funds, court documents said.

Landberg obtained the $8.7 million from a German bank, WestLB, by falsely claiming he would carry out real estate and franchise store transactions in Florida and Alabama, in addition to the Long Island development deal, prosecutors said.

Landberg in 2009 requested nearly $4 million from WestLB "to fund a loan to develop real property on Long Island," records show.

"However," court documents said, "upon receiving the $3.948 million loan, Landberg misappropriated most of the money and used it for the benefit of other funds and for himself."

He used $2 million to pay for separate investment commitments, "paid $350,000 to investors as purported earnings on their investments, and diverted over $100,000 to his own personal accounts," according to the criminal complaint in the case.

Landberg couldn't be reached for comment. His lawyer, Michael Bachner, said, "The money Mr. Landberg received from the bank as advances was used for the benefit of the funds he managed, and not for his personal enrichment."

Court documents, filed by the office of U.S. Attorney Preet Bharara, gave no details on the Long Island project. Landberg entered his plea on Friday before U.S. Judge Laura Taylor Swain in Manhattan. Sentencing will be in March, Landberg's attorney said.