Greenwich Investment Advisor Pleads Guilty to Tax Evasion

David X. Sullivan, United States Attorney for the District of Connecticut, Thomas Demeo, Acting Special Agent in Charge of IRS Criminal Investigation in New England, and P.J. O'Brien, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation, today announced that JEFFREY ARSENAULT, 63, of Greenwich, waived his right to be indicted and pleaded guilty yesterday before U.S. District Judge Victor A. Bolden in New Haven to tax evasion.

According to court documents and statements made in court, Arsenault was the managing member and majority owner of Old Greenwich Capital Advisors LLC ("OGCA"), which is the investment manager of Old Greenwich Capital Partners LP ("OGCP"), a private equity fund of funds. From 2013 through 2022, OGCP received investment distributions of at least $9.1 million, which should have been distributed to OGCP investors, reinvested, or used to pay authorized expenses. Instead, Arsenault used approximately $5.2 million of the total to pay his personal expenses or other unauthorized expenses, including payments for college tuition and golf club dues.

From 2019 through 2022, Arsenault, through OGCA, also received approximately $2.2 million in net income for performing consulting services for third party investment firms. Although he knew that he was entitled to only 70 percent of the net income based on his OGCA partnership agreement, he kept all of it and used that money for his personal expenses.

From 2013 to 2016, Arsenault failed to report the proceeds from his embezzlement scheme on his individual federal income tax returns, resulting in income tax due and owing of approximately $1,160,161. From 2017 through 2022, Arsenault failed to file any individual tax returns, resulting in total tax due and owing of approximately $1,002,709.

As part of his embezzlement and tax evasion scheme, from 2017 to 2020, Arsenault booked false intercompany loans between OGCA and OGCP to conceal his misappropriation of investor funds, which caused OGCA and OGCP to file false Forms 1065 and provide Arsenault false Schedule K-1s. From 2019 to 2022, Arsenault mischaracterized and concealed from his accountants financial activity, including deposits and wire transfers into his personal bank account, which caused them to prepare false accounting records and tax returns for OGCA.

Arsenault has agreed to pay restitution of $2,162,870 to the IRS. He has also agreed to pay restitution of $4,668,523.75 to victims in a related civil case, Securities and Exchange Commission v. Jeffrey Arsenault, 3:24cv1633.

Arsenault is released on a $50,000 bond pending sentencing, which is not scheduled. Tax evasion carries a maximum term of imprisonment of five years.

This investigation is being conducted by the Internal Revenue Service, Criminal Investigation Division and the Federal Bureau of Investigation, with the assistance of the Securities and Exchange Commission. The case is being prosecuted by Assistant U.S. Attorney Heather Cherry.