Hedge fund founder Dan Kamensky gets prison sentence for fraud during Neiman Marcus bankruptcy

The New York hedge fund founder who was charged with committing fraud during Neiman Marcus’ bankruptcy last year has been sentenced to six months in prison. Marble Ridge Capital founder Dan Kamensky, 48, pleaded guilty to bankruptcy fraud and extortion committed while he was on a committee of unsecured creditors in the Neiman Marcus bankruptcy. The sentence, handed down Friday by U.S. District Court Judge Denise L. Cote in New York, includes six months of supervised release under home detention after the prison term.

Kamensky admitted he pressured a rival bidder to abandon a higher offer for Mytheresa, an asset owned by Neiman Marcus at the time, so that his hedge fund could buy it for a lower price. Kamensky had a legal duty to represent the interests of all unsecured creditors and secure the best offer. “Daniel Kamensky committed bankruptcy fraud — undermining the integrity of bankruptcy proceedings and violating his fiduciary responsibility — in an effort to take extra profits for himself and his hedge fund,” said U.S. Attorney Audrey Strauss in a statement. “As he himself predicted, this fraud has now landed Daniel Kamensky in prison.” Kamensky, who was a successful bankruptcy lawyer before starting his hedge fund, admitted he tried to cover up his actions by telling a Jeffries LLC investment banker to lie on his behalf. According to an FBI investigation and prosecutor’s court documents, Kamensky told the banker “This conversation never happened” and “Do you understand ... I can go to jail?