Hakan Yalincak

From Wikipedia, the free encyclopedia

Hakan Yalincak
Born	March 30, 1984 (1984-03-30) (age 24) Izmir, Turkey
Penalty	42 month imprisonment
Status	incarcerated
Occupation	college student, derivatives trader
Parents	Omer Bulent Yalincak and Ayferafet "Ayfer" Yalincak

Hakan Yalıncak (born March 30, 1984(1984-03-30) in İzmir, Turkey), also known as Hagan Yalincak and Jon Sahenk, is an American felon, derivatives trader, and New York University college student who pleaded guilty to charges of bank fraud and wire fraud for his role in a multi-million dollar hedge fund fraud and Ponzi scheme.

Contents 1 Biography 1.1 Early life 2 Fraud 2.1 Daedalus Capital Relative Value Fund 2.2 NYU Gift 2.3 Insurance fraud scheme 3 Criminal charges 3.1 Indictment and arrest 3.2 Cooperation and guilty plea 3.3 Incarceration and bail 3.4 Sentence 3.4.1 Hospitalization 3.4.2 Restitution 4 Mickey Sherman dispute 5 Immigration status 6 Notes 7 External links

[edit] Biography

[edit] Early life

Hakan Yalincak was born in Izmir, Turkey on March 30, 1984, the first of two children born to Kurdish parents Omer Bulent Yalincak and Ayferafet "Ayfer" Yalincak.

Omer, an obstetrician gynaecologist, received an oncology fellowship in Japan in 1989, where the family moved.

In 1992, Yalincak, his sister Hale, (born 1987), and Ayfer entered the United States on a six-month visa. Omer, meanwhile, returned to Istanbul to care for his terminally ill mother until rejoining the family in July 1992.

The family then lived in Beverly Hills, La Jolla, San Diego, Kentucky, and Indiana seeking employment to obtain work visas and permanent resident status until settling in Bristol, Connecticut in 1994.

In April 1995, when Yalincak was 11, Ayfer was arrested and pleaded guilty to a charge of practicing medicine without a license during the family's time in Indiana and was sentenced to two years in state prison. While Omer began working menial jobs to support the family, Yalincak assumed responsibility of the family's household finances and caring for his younger sister, Hale.

Yalincak also came under the influence of a Turkish couple his family met through the local church. The couple became surrogate caregivers to the Yalincak children and employed Yalincak at their fruit store in Avon, Connecticut. Additionally, the couple enlisted Yalincak to engage in credit card fraud in order to repair their credit reports and save their home from foreclosure.

In July 1997, Ayfer rejoined the family after having served her prison sentence in Indiana. That year, the family also applied for political asylum, which they were granted in April 1998.

In 2000, Yalincak graduated from Bristol Central High School at age 16 and was accepted at Boston University, Fordham University, George Washington University, New York University, Quinnipiac University, Roger Williams University, and the University of Connecticut. Yalincak decided to attend New York University as a history major, and the family soon moved to Newtown, Connecticut and, later, Pound Ridge, New York, where Yalincak commuted to and from school each day.

[edit] Fraud

[edit] Daedalus Capital Relative Value Fund

In December 2001, Yalincak met a former Countrywide mortgage trader named Alan J. Conner who taught him about financial trading and investing. Thereafter, Yalincak opened several trading accounts in his parents' names.

In 2003, after having learned about financial trading and investment by opening several accounts in his parents' names, Yalincak and an associate named Matthew J. Thomas decided to form the hedge fund, Yasam Trading, LLC., later renamed Daedalus Capital Partners, LLC.

Throughout 2003, Yalincak and his associates used fraudulent credit card transactions to raise capital for the hedge fund. In May 2004, the credit card companies became aware of the fraud, froze the related bank accounts, and notified federal authorities who started an investigation into Yalincak and his associates' activities.

In June 2004, Yalincak hired celebrity criminal defense lawyer Michael "Mickey" Sherman to deal with the government's probe into the fraud. Throughout the following year, Yalincak and his partners also continued to solicit investments totalling almost $8.9 million from several prominent businessmen in order to repay the bilked credit card companies and initial investors who had sued to recover their funds.

As the federal investigation continued and investors in the Daedalus fund began seeking reimbursement, Yalincak came up with a $43 million check kiting scheme that laid the groundwork for his bank fraud indictment and subsequent arrest.

In March 2005, Yalincak used counterfeit Bank of New York checks to deposit almost $18 million into a UBS AG account. He had $2.5 million of those funds transferred to another corporate account at the Bank of New York, from which he would later intend to withdraw $2.5 million to refund to investors.

When the Bank of New York began suspecting fraud and froze his funds, Yalincak tried to release the hold on his accounts by depositing a counterfeit $25 million check from a JPMorgan Chase account into the initial Bank of New York account to cover the $18 million transfer to UBS.

The defrauded Daedalus investors have since filed for Chapter 7 involuntary bankruptcy to recover their funds.

[edit] NYU Gift

In February 2004, Yalincak made a major gift proposal to New York University on behalf of his family through The Omer Bulent and Ayferafet Yalincak Family Foundation. The phony Foundation was then established in Delaware in May 2004 in the midst of the gift negotiations.

As part of the gift arrangements, the university would receive a $21 million pledge from the Foundation to establish a professorship of Ottoman studies, a permanent home for the university's General Studies Program, and to fund the construction of a classroom named after the Yalincak family.^[1]

At a September 29, 2004 fundraiser gala event, NYU received a $1.25 million check. NYU used the money to construct a classroom named after the family.

In 2006, NYU asked a bankruptcy court to let it keep $200,000 of the $1.25 million donation, saying it incurred losses because of the fraud.^[2] A New York bankruptcy court judge approved the settlement in 2007 and the university returned $1.05 million to investors.

Yalincak has said that the NYU donation's purpose was originally to steer the admission of his friends and sister. Prosecutors say that the gift's publicity was used by Yalincak and his mother to get additional investments for the hedge fund.

[edit] Insurance fraud scheme

In 2005, the Mass Mutual Life Insurance Company issued three policies for Yalincak with a death benefit of $30 million.

[edit] Criminal charges

[edit] Indictment and arrest

On April 26, 2005, a Bridgeport, Connecticut grand jury issued a bank fraud indcitment against Yalincak.^[3] Yalincak was arrested by FBI agents on May 6, 2005 and held without bail at the New Haven Correctional Center in New Haven, Connecticut.

On June 16, 2005, Ayfer Yalincak was also arrested. A New Haven grand jury had returned an indictment charging her and Hakan with one count of conspiracy to commit wire fraud and three counts of wire fraud.^[4]

[edit] Cooperation and guilty plea

In January 2006, Yalincak entered into a proffer agreement with the government to assist the U.S. Attorney's Office with its investigation of the hedge fund fraud.^[5] His charges were ultimately reduced to one count each of bank and wire fraud, to which he pleaded guilty on June 6, 2006.^[6]

On July 13, 2006, Ayfer also pleaded guilty to a single count of conspiracy to commit wire fraud.^[7]

[edit] Incarceration and bail

Yalincak was incarcerated for 20 months at the Donald W. Wyatt Detention Center in Central Falls, Rhode Island while awaiting sentencing and was denied bail eight times since his arrest. During his incareceration, he attempted suicide three times and was attacked once by another inmate for "snitching."

In January 2007, Yalincak was released on $1,100,000 bail and remained under house arrest in Hartford, Connecticut while he awaited sentencing.^[8][9][10]

[edit] Sentence

Yalincak was sentenced to 42 months of imprisonment on April 11, 2007 by U.S. District Court Judge Janet Bond Arterton for the federal district of Connecticut for one count each of bank and wire fraud. Including credit for the time served awaiting sentencing, good behavior, and under house arrest, Yalincak may only serve 16 months. Yalincak was also ordered to pay $4.18 million in restitution and five years of probation.^[11][12][13]

[edit] Hospitalization

Yalincak, who was scheduled to self-surrender on May 8, 2007 was admitted to the St. Francis Medical Center emergency room in Hartford, Connecticut on May 7, 2007 for overdosing on an "undisclosed amount of medication(s)."^[14]

Magistrate Judge Joan G. Margolis ordered that Yalincak be taken into custody by U.S. Marshals until released from the hospital.^[15] Yalincak is currently being held at the Donald W. Wyatt Detention Center in Central Falls, Rhode Island.

[edit] Restitution

Since his arrest, Yalincak has also initiated lawsuits against several former partners and associates to recover funds. To date, he has repaid investors approximately $4.4 million.

He has also filed defamation lawsuits against the New York Post and New York magazine for articles published in connection to his case, as well as a lawsuit against a second business partner, who Yalincak says knew about the fraud and benefitted from the NYU Gift. ^[16]

[edit] Mickey Sherman dispute

In 2006, Yalincak complained to the Connecticut Statewide Grievance Committee that his former attorney, celebrity criminal defense lawyer Mickey Sherman had overcharged him and provided little documentation to show where his money went.

Sherman paid Yalincak a $50,000 refund during the grievance process, and the former client tried to drop his charges, but the agency wouldn't allow it. The panel then started investigating whether or not Sherman had acted improperly by making a payment to someone who brought accusations against him to the state agency. Sherman said the payment had nothing to do with the complaint to the agency but was made in exchange for Yalincak's agreement not to file a lawsuit against him. In September 2006, a regional panel of the Statewide Grievance Committee issued a finding of probable cause against Sherman.^[17]

Yalincak has also alleged that Sherman had blackmailed him with the charges against Ayfer which led Yalincak to attempt suicide while in prison. An October 2006 incident resulted in an 8.5" scar on Yalincak's left arm.

In May 2007, Sherman admitted to violating two rules of professional conduct stemming from the Yalincak matter. The State of Connecticut Grievance Committee will issue its ruling on Sherman's fate in the near future. It has been reported that Sherman will be reprimanded for not having a written fee agreement as required in Connecticut and for failing to disclose details to disciplinary authorities.

Yalincak is currently represented by Bernard Grossberg, a Boston-based criminal defense lawyer.

[edit] Immigration status

Yalincak is a Turkish citizen who was granted political asylum in 1998. Under immigration law, his crime constitutes an aggravated felony ("fraud on another person or against the government, where the amount of loss exceeds $10,000"), which means Yalincak faces possible deportation proceedings following the completion of his sentence. His current immigration lawyer is Edwin T. Gania of Mark Jacob Thomas & Associates.

[edit] Notes

[edit] External links

• "’Leonardo’ Hakan Hürriyet’e anlattı", 2008-03-14. Retrieved on 2008-03-29. (Turkish)