Investment consultant Anthony DiPace was sentenced to five years in federal prison yesterday on 11 counts of mail fraud for falsely representing his qualifications as a candidate for investment monitor of the Hotel Union and Hotel Industry of Hawai‘i Pension Plan.
In 1996, in competition with four other applicants to oversee investments made within the more than $200 million pension fund, DiPace made false claims about his clients and exaggerated their assets, said Assistant U.S. Attorney Marshall Silverberg.
Silverberg said DiPace, of Albany, N.Y., claimed in mailings to pension fund trustees that he had 40 Taft-Hartley Fund clients, 10 whom had assets in excess of $100 million. In reality, DiPace had three Taft-Hartley clients, none with assets in excess of $100 million, prosecutors said.
"The reality was he was far less qualified than the other applicants," Silverberg said.
U.S. District Judge David Ezra yesterday ordered DiPace to pay $32,000 restitution based on a claim by the Hotel Employees and Restaurant Employees Union Local 5 that it had been victimized, prosecutors said.
Although DiPace was not selected investment monitor for the pension fund, Silverberg said, he held similar positions with Local 5 and nonprofit labor organization Unity House. The victimization claim was based on the fact DiPace was not registered with the Securities and Exchange Commission as a securities adviser, prosecutors said.
Rustam Barbee, DiPace’s attorney, said yesterday an appeal is planned.
The local’s then–secretary-treasurer, Anthony Rutledge, who supported DiPace assuming the role over Smith Barney, said yesterday that "(DiPace’s) performance was excellent. He made money (for the other funds) when he was a monitor."
