From BusinessWeek
Financier Martin Armstrong, jailed since January 2000 on civil and criminal charges stemming from what prosecutors said was a $700 million Ponzi scheme, was released from prison last week.
Armstrong, the founder of now-defunct Princeton Economics International Ltd., will be confined to his home until his time in federal custody ends in September, said Chris Burke, a spokesman for the U.S. Federal Bureau of Prisons. Armstrong is permitted to leave for work and will check in periodically at a halfway house in the Philadelphia area.
“I would like to take the time to thank everyone who has stood by me these many years,” said a letter under Armstrong’s name posted on the website MartinArmstrong.org. “What I have seen is the deep corruption that lingers through the political- financial system that threatens the future of my family and friends.”
Armstrong was jailed a record seven years for defying a judge’s order to produce gold bars, coins and other assets. His detention for contempt in a high-security Manhattan prison was the longest of its kind in a federal white-collar civil case. In 2006, Armstrong was sentenced to five more years in prison after pleading guilty to conspiracy in a related criminal case.
He has repeatedly challenged his guilty plea.
The former money manager built his reputation on his theory that economic cycles recur over centuries. His firm, which was based in Princeton, New Jersey, operated from an office overlooking Tokyo’s Imperial Palace and grew to manage as much as $3 billion.
Japanese Investors
Thomas Sjoblom, a lawyer who represented Armstrong when he was jailed for contempt, didn’t immediately respond to a phone call and e-mail seeking comment. Armstrong’s daughter didn’t immediately respond to an e-mailed request for comment.
Armstrong was charged in 1999 with defrauding mostly Japanese investors out of more than $700 million. In December 2001, Republic Securities, now a unit of HSBC Holdings Plc, pleaded guilty to helping Armstrong swindle Japanese clients and paid $569 million, then the largest reimbursement by any corporation to investors victimized in a fraud.
Two ex-Republic employees and a former Armstrong worker also pleaded guilty.
In the civil case, the Securities and Exchange Commission and the Commodity Futures Trading Commission sued Princeton Economics and Armstrong in 1999. The judge in that case jailed Armstrong in January 2000 for contempt after Armstrong refused to surrender $14.9 million in gold bars and rare coins.
Violent Attack
Armstrong said he didn’t have them to turn over.
While in prison, Armstrong said he spent lengthy periods in isolation. A violent attack left him hospitalized in intensive care.
Armstrong spent his first 7 1/2 years in a high-security federal detention center in Manhattan and the remainder of his sentence in a prison camp in New Jersey.
The criminal case is U.S. v. Armstrong, 99-cr-997, U.S. District Court, Southern District of New York (Manhattan).
--Editors: Stephen Farr, Pierre Paulden.To contact the reporter on this story: Zeke Faux in New York at zfaux@bloomberg.net; David Glovin in Manhattan federal court at dglovin@bloomberg.net.
To contact the editor responsible for this story: David Rovella at drovella@bloomberg.net.
