In a story that reporter Clark Reilly has broken at BloggerNews, it appears that the founder and top dog of Sessa Capital – John Petry – missed a rather large embezzlement scheme when he was Chief Operating Officer at a previous firm.
This should raise serious concerns for Sessa Capital investors, as well as Ashford Prime shareholders who might be thinking about replacing Ashford Prime management with John Petry and his board nominees.
According to BloggerNews, the John Petry bio, and confirmed by our own research, it appears that John E. Petry was the C.O.O. of Columbus Hill Capital Management from November of 2010 until February of 2012.
The FBI issued a press release just prior to the departure of John E. Petry from Columbus Hill concerning an embezzlement scheme that went on right under his nose!
The FBI release states, among other things:
The former chief financial officer of Columbus Hill Capital Management LP, an investment management firm based in Short Hills, N.J., today admitted to embezzling more than $10.4 million from his employer.
“David Newmark admitted stealing from his own management company, creating a phony account to collect more than $10 million in fraudulent deposits”, said U.S. Attorney Paul J. Fishman.
Newmark admitted that between February 2008 and March 2011, he embezzled from his former employer by requesting checks and wire transfers from custodians of the investment management company accounts and diverting the funds to bank accounts he controlled. The majority of the $10.4 million that Newmark embezzled came from the management company, rather than investor funds.
How did John Petry – the Chief Operating Officer of Columbus – miss money being embezzled from his own accounts? Not investor accounts, mind you, but management’s own accounts?
Is John Petry really the guy that Sessa Capital investors want to shepherd their money? Is John Petry who, in addition to having zero hotel experience, was so checked out that he missed criminal activity going on in his vicinity, the guy that Ashford Prime shareholders want steering their company?