Hedge fund CEO pleads guilty in $4 million swindle

The former CEO of a hedge fund set up for the "little guys" and "moms and pops" admitted today that he conspired with others to swindle those same "little guys" of more than $4 million.

Michael J. Spak, 44, of Burlington County, ran the Osiris Fund which convinced 75 people to invest $12 million from June 2009 through November 2011, according to court documents.

Though Spak and his associates had promised to take no more than 3 percent fee, they spent $300,000 to buy the "Fintastic," a luxury sportfishing boat, and fraudulently diverted another $4 million, according to U.S. Attorney Paul J. Fishman.

Speak and his coconspirators, who were not named in the information filed by the U.S. Attorney's office, continued to count the diverted $4 million as a fund asset. When Osiris lost $4.5 million on bad investments, Spak hid those losses from their investors and created "fictitious assets" and continued to charge millions in management fees, according to court papers.

Spak, of Chesterfield, pleaded guilty today in Camden federal court to a charge of conspiracy to commit wire fraud. He faces a sentence of up to 20 years in jail and a $250,000 fine.

The case was investigated by the federal Financial Fraud Enforcement Task Force.