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United States v. Bryson

United States District Court, D. Connecticut

April 1, 2015

DAVID BRYSON et al., Defendants

Page 148

For David Bryson, Defendant: James I. Glasser, Jenny R. Chou, LEAD ATTORNEY, Wiggin & Dana-NH, New Haven, CT.

For Bart Gutekunst, Defendant: Daniel E. Wenner, John W Cerreta, LEAD ATTORNEYS, Day Pitney LLP-Trmbl St Htfd-CT, Hartford, CT; Stanley A. Twardy, Jr., EAD ATTORNEY, Day Pitney LLP-Stmfd, Stamford, CT.

For Richard Pereira, Defendant: Brian E. Spears, Nathan J. Buchok, LEAD ATTORNEYS, Brian Spears LLC, Southport, CT.

For New Stream Capital LLC, Movant: Stephen V. Manning, LEAD ATTORNEY, O'Brien, Tanski & Young, LLP, Rocky Hill, CT.

For USA, Plaintiff: Liam Brennan, Michael S. McGarry, LEAD ATTORNEYS, U.S. Attorney's Office-NH, New Haven, CT.


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Janet C. Hall, United States District Judge.


On May 21, 2014, defendants David Bryson (" Bryson" ), Bart Gutekunst (" Gutekunst" ), and Richard Pereira (" Pereira" ) pled guilty to Count One of the Second Superseding Indictment, conspiracy to commit wire fraud in violation of section 371 of title 18 of the United States Code. The court assumes familiarity with the underlying facts of the case and with the issues set forth in its prior Ruling re: Findings of Fact, United States v. Bryson et al., 3:13-cr-0004-JCH, (Jan. 12, 2015) (Doc. No. 353) (" Ruling" ). Still at issue in relation to sentencing, and the subject of the present ruling, are 1) whether the court should include additional investors in its loss calculation, 2) whether investors who invested prior to the conspiracy that began in March 2008 should be included in the loss calculation, 3) determining a reasonable estimate of the loss attributable to the offense conduct, and 4) whether a two-level enhancement for the use of sophisticated means is appropriate.


A. Additional Post-March Investors

Based on its consideration of the additional evidence submitted by the government and defendants, as well as the record as a whole, the court determines that it is appropriate to include seven additional investors as victims for the purposes of its loss calculation, based on its finding that these investors invested on the basis of misrepresentations made by the defendants or at their direction. For each of these investors, and for substantially the same reasons as those discussed in the court's prior Ruling, Ruling at 6-7, these acts and omissions were within the scope of the defendants' agreement, and foreseeable to the defendants; thus all three defendants are accountable for any resulting losses.

1. AA Partners

AA Partners invested $10.2 million in the Cayman Fund after the conspiracy

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began. The investments were made from June 6, 2008 through August 1, 2008. Prior to investing, AA Partners received the Organizational Chart that omitted the Bermuda Fund on two different occasions in April 2008. Government's Memorandum in Aid of Sentencing (Doc. No. 356) (" Gov't Mem." ), Exh. Tab 4 (Doc. No. 356-4). The court has already determined that this chart materially misrepresented the structure in which new investors would be investing. See Ruling at 5-7. AA Partners representatives also met with Joe Tremblay in Mid-April. In May 2008, AA Partners, along with all other investors, received an email from Tremblay containing a " New Stream Fact Sheet," which stated that New Stream was " currently open to new investments through the feeder structure launched on 1 December 2007," without reference to the Bermuda Fund or to the fact that the plan launched in December 2007 had been materially altered in March 2008. G. Exh. 66.

Given the evidence the court has previously credited regarding New Stream's marketing strategy, Ruling at 6-7, the court finds that this evidence is sufficient to conclude that the representations made to AA Partners were misleading in that they did not include the Bermuda Fund, and that the information not disclosed was material. There is no evidence in the record that contradicts this conclusion,[1] or that suggests that the existence and seniority of the Bermuda Fund was ever disclosed to AA Partners prior to their investments being made.

2. Atlas

Atlas Capital Group (" Atlas" ) invested $6.15 million between April 1, 2008 and September 1, 2008. On March 25, 2008, while New Stream was in the process of amending the Collateral Agency Agreement, Notes, and Note Purchase Agreements to reflect Bermuda's continued seniority in the capital structure, Tremblay emailed Atlas representative Sean Coleman regarding a potential off-shore investment without reference to the changes that had taken place following the Gottex meeting. Gov't Mem., Exh. Tab 1 (Doc. No. 356-1) at 8. On April 28, 2008, Atlas analyst Frederic Hevras had a conference call with David Bryson. Hevras's notes from the call indicate that Bryson informed him the fund had received redemptions totaling 100 million " from some funds of funds (Eden Rock and Pentagon) . . . but some inflows as well so the net impact will be smaller." Id. This statement misrepresented the amount of redemptions New Stream was facing. At the time of the call, Gottex had already placed its $300 million plus redemption. There is no evidence that Bryson informed Hevras about the continued existence and seniority of the Bermuda Fund during the April 28 call, and Atlas internal records do not reference the Bermuda Fund until March 2009. Gov't Mem. Exh. Tab 1 (Doc. No. 356-1) at 2, 12. Atlas also received Tremblay's " New Stream Fact Sheet" email in May 2008. G. Exh. 66. In an interview with Special Agent Allen, representative Richard Morgan stated that the information that Atlas would be junior to $300 million of investments would likely have prohibited any investment by Atlas. Id. at 1. Sean Coleman stated that Atlas knew there was a large fund of funds invested with New Stream, but believed that it was invested in the same structure as Atlas and had the same terms (pari passu) as Atlas. Id. at 2. He further provided that, if Atlas had known the Bermuda Fund was senior to its position, there is an " infinitesimally

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small chance" Atlas would have invested at all. Id. at 3.

Defendants argue that the evidence presented by the government is misleading in that it overlooks New Stream's long history of communications with Atlas, and that Atlas representatives were clearly aware of the Bermuda Fund's existence prior to the restructuring, including having received information about the Bermuda Fund in June 2007. Defendants' Supplemental Memorandum Regarding Loss Calculation (" Def.'s Supp. Mem." ) (Doc. No. 366) at 3. However, the court views this as irrelevant to the question of whether Atlas was aware of Bermuda's continued existence and seniority following the onset of defendants' conspiracy. Like all investors, Atlas was told in November 2007 that the Bermuda Fund was closing. In fact, in late January 2008, Hevras was told by David Bryson that the transfer to the new structure was " almost completed." Gov't Mem., Exh. Tab 1 (Doc. No. 356-1) at 7. There is no evidence in the record to contradict the conclusion that the decision to retain Bermuda as senior in March 2008 was not disclosed to Atlas, or that Atlas was not otherwise aware of Bermuda's continued existence and seniority. Thus, the evidence is sufficient for the court to infer that misrepresentations were made to Atlas, and that Atlas invested on the basis of those misrepresentations.

3. Auda Advisor Associates LLC

Auda Advisor Associates LLC (" Auda" ) invested $3 million in the Cayman Fund in August 2008. In May 2008, Auda received the " New Stream Fact Sheet" and email stating that the fund was open to new investments " through the feeder structure launched on 1 December 2007." In June 2008, in response to a question from Auda regarding leverage, Tremblay responded that " to date we have not felt the need to use leverage on any of our asset classes . . ." Gov't Mem. Exh. Tab 7 (Doc. No. 356-7). As ...

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