PE manager charged with stealing $9.3 million from investors

A private equity fund manager pled not guilty in state Supreme Court Monday to allegedly embezzling about $9.3 million in investor money, according to the Manhattan district attorney's office.

Prosecutors accused Penn, a fund manager at Camelot Acquisitions Secondary Opportunity Management, of using the money to cover personal expenses like credit card payments and a car.

Penn allegedly moved the money to a shell company as payment for phony "due diligence" services from a friend, 44-year-old Altura St. Michael Ewers of San Francisco, then laundered the stolen funds, according to prosecutors. The two allegedly cooked up fake invoices to fool auditors and investors.

Penn's attorney, Benjamin Brafman, said in a statement that the charges "do not affect the assets" of his client's fund.

"With respect to the allegations against Mr. Penn, he intends to address those issues through counsel in a responsible and timely manner," Brafman said.

Penn and Ewers face charges of grand larceny, money laundering and falsifying business records. Penn's bail was set at $2.5 million. Ewers was arrested in California Sunday and is awaiting arraignment in New York. The two men also face a lawsuit from the Securities and Exchange Commission over the alleged scheme.