Former Newtown Resident Sentenced To Two Years In Hedge Fund Fraud

By John Christoffersen

Associated Press

NEW HAVEN — A former resident of Newtown was convicted with her son in a multimillion-dollar hedge fund scam was sentenced Monday to two years in prison after her college-age son was described as a “land mine” who led the family on a series of posh encounters that fooled sophisticated investors.

Ayferafet Yalincak, 52, pleaded guilty last year to conspiracy to commit wire fraud, but tried to downplay her role in a scheme she blamed on her 22-year-old son, Hakan.

“I have the uneasy feeling today of not really knowing what should be believed and what should not be believed about this defendant,” said US District Judge Janet Bond Arterton, who ordered Yalincak to surrender to federal authorities April 24. Yalincak and her son also must pay $2.25 million in restitution.

“I don’t have confidence her future will be one without further fraud Arterton said.

Prosecutors say Hakan Yalincak charmed his way into the exclusive world of Greenwich high finance by posing as an heir to a wealthy Turkish family, shuttled counterfeit checks across the world and brokered deals with a Kuwaiti financier. Ayferafet Yalincak told a federal judge last year that she attended meetings with investors and allowed her son to present her as a member of an exceedingly wealthy Turkish family who was going to invest millions in his hedge fund.

Authorities say the Yalincaks also gave $1.25 million of investor money as a down payment on a $21 million donation to New York University, where Hakan was a student. The Yalincaks showed potential investors a press release about that donation, using it to cast themselves as wealthy philanthropists in hopes of luring more investment, prosecutors said.

The Yalincak family moved frequently, buying a house in Newtown on Charter Ridge Road in the summer of 2000 and mortgaging it until the debts exceeded the value, court records show. When sued by creditors, the Yalincaks never showed up for court and their house was ordered foreclosed, records show.

 Hakan Yalincak was “like a land mine,” his 19-year-old sister, Hale, testified. She said he was violent toward family members and would threaten to kill himself.

She described a series of encounters to woo investors and NYU officials that took the family to a fancy French restaurant in Greenwich, a penthouse apartment in Manhattan, an exclusive Billy Joel concert in New York, and a chauffeured trip around California.

Hakan Yalincak was in control, telling family members what clothing and jewelry to wear and how to eat, Hale Yalincak testified. She said her brother would often kick her under the table to get her to say certain things and tell their father to sit up straight and not eat so much.

With each encounter, word spread about how brilliant Hakan was as a trader.

“It kind of reminds me of the game telephone,” said Hale Yalincak, who along with her father was not charged.

Ayferafet Yalincak also became convinced her son was brilliant, according to her attorney, Jeremiah Donovan.

“She truly did believe this was the boy genius, the child of her dreams, who would make everybody rich,” Donovan said.

Arterton rejected the idea. Prosecutor Calvin Kurimai also rejected it, saying Ayferafet Yalincak knew that family expenses were paid from credit card fraud from 1998 to 2002.

Hakan Yalincak faces more than five years to 6½ years under guidelines for managing the scheme when he is sentenced next month.

“I made a lot of regrettable mistakes in my life and I’m going to work with my family to fix those mistakes,” Hakan Yalincak said during a break in the court hearing.

Ayferafet Yalincak, who faced two to 2½  years in prison, said in court papers that she was “bent to the will” of her son and played a limited role in the fraud.

She addressed the court briefly Monday, saying she felt she was helping Hakan.

“My son has made lots of mistakes,” she said. “As a family, we are trying to rectify the past.”

The hearing was delayed briefly when Yalincak, on the verge of learning her sentence, told Arterton she wasn’t feeling well and stumbled back to her chair. The hearing resumed about 45 minutes later.

Arterton said the loss attributed to Ayferafet Yalincak was more than $1 million, while prosecutors say she was responsible for an intended loss of $5.3 million and an actual loss of $3.9 million after some of the money was returned to investors.

Ayferafet Yalincak purchased, or had purchased for her, a $56,000 Mercedes Benz and a $51,000 diamond ring with investors’ funds, authorities say. She also lived in a house with an annual rental fee of $77,000 that came from investors’ funds, prosecutors said.

Ayferafet Yalincak will get credit for more than 14 months in prison she has already served.

Hale Yalincak said her brother was an intelligent loner who spent a lot of time on the computer when he was younger.

“He told us he was manipulating the Japanese economy, and without him the Japanese economy would fail,” she said.

Following their sentences, both Ayferafet and Hakan Yalincak face possible deportation to Turkey.