Prosecutors charged three men with stealing millions from an offshore investment fund that is under investigation by the Justice Department and the Securities and Exchange Commission, the Manhattan district attorney, Robert M. Morgenthau, said yesterday.
The charges relate to Evergreen Securities, a $218 million fund that filed for Chapter 11 protection in January in Orlando, Fla.
Investigators charged the company's owner, William J. Zylka; his lawyer, James P. Conroy; and the fund manager, Martin W. Boelens Jr., with grand larceny.
Beginning in 1992, customers invested in Evergreen based on promises of government and mortgage-backed securities, interest rates of 9 to 12 percent and the privacy of an offshore account, prosecutors said.
Evergreen was registered in the British Virgin Islands, was based in Nassau, Bahamas, and was managed in Orlando. Prosecutors have described Evergreen as having used money from new investors to make interest payments to earlier investors.
New York investigators arrested Mr. Zylka, 64, and Mr. Conroy, 61, yesterday in New Jersey. The two were charged with stealing $27 million from Evergreen from late 1999 to mid-2000. They were awaiting transport to New York, Mr. Morgenthau said. Mr. Boelens, 43, of Orlando was arraigned before Acting Justice Brenda S. Soloff at State Supreme Court in Manhattan, and released without bail. Mr. Boelens is charged with helping embezzle $22.7 million from the fund.
Mr. Zylka's lawyer declined to comment on the case. Mr. Conroy's lawyer could not be reached. Mr. Boelens's lawyer, Barry A. Bohrer, did not return calls for comment.