A federal appeals court has upheld the convictions of three former executives of Aequitas Management, a Lake Oswego-based investment firm, solidifying their guilty verdicts on charges of conspiracy to commit wire and mail fraud. The recent decision by the 9th U.S. Circuit Court of Appeals, a three-judge panel, definitively rejected the appeals arguments presented by Robert Jesenik, Andrew MacRitchie, and Brian Rice. These former executives, who previously argued they were barred from presenting a full defense, faced serious accusations related to the collapse of Aequitas Management. The court’s ruling affirmed the fairness of U.S. District Judge Michael H. Simon’s instructions to the jury, a critical element in the prosecution’s case. Crucially, the appellate panel dismissed the defense’s assertion that Aequitas’ investors’ potential negligence constituted a viable defense against wire fraud charges. The legal saga began in August 2020 when Jesenik, MacRitchie, and Rice were indicted on charges stemming from the firm’s operations following its dramatic downfall. Jesenik, serving as the company’s chief executive officer, faced additional charges of making a false statement on a loan application, adding to the complexity of his legal situation. MacRitchie held the role of chief compliance officer, while Rice served as an executive vice president.
The core of the prosecution’s case revolved around the executives’ alleged misuse of investor funds through deliberate misrepresentations and misleading half-truths regarding the company’s financial health, investment strategies, and associated risks. Prosecutors presented compelling evidence demonstrating that the executives routinely paid prior investors with money received from incoming investors – a classic Ponzi scheme tactic. This scheme ultimately drew the scrutiny of the Securities and Exchange Commission (SEC), leading to the seizure of company control in 2016. The SEC’s intervention followed significant investor losses exceeding $360 million. While substantial sums were recovered through various lawsuits and the intervention of a court-appointed receiver, the initial damage was considerable. The six-week trial, concluded in May 2023, resulted in a guilty verdict for all three men on one count of conspiracy to commit mail and wire fraud, alongside 28 counts of wire fraud. This verdict underscored the severe consequences of their actions.
Following the jury’s decision, Jesenik received a sentence of 14 years in prison, reflecting the gravity of his crimes. MacRitchie’s sentence was set at five years and 10 months, while Rice received a sentence of three years and one month. Circuit Judge Andrew D. Hurwitz authored the detailed 43-page opinion, joined by Circuit Judges Lucy H. Koh and Anthony D. Johnstone. This ruling represents a significant legal victory for the prosecution and serves as a stark reminder of the potential repercussions for those who engage in fraudulent investment practices. The case highlights the importance of regulatory oversight and the protection of investors from deceptive financial schemes.
