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Valencia Man Sentenced to Federal Prison

Posted: February 27, 2008 3:36 p.m.
Updated: April 29, 2008 5:02 a.m.
Valencia resident Keith Gilabert, 33, received a five-year sentence from U.S. District Judge Stephen Wilson for orchestrating the scheme, federal sources reported on Monday evening that . Gilabert was the founder of an investment company and was sentenced to federal prison terms Monday for a hedge fund fraud scheme that bilked investors out of at least $2.5 million. He got the maximum sentence under the law.

He also was ordered to pay more than $510,000 in restitution to his victims.

Gilabert's co-conspirator, Justin Paperny - a former executive at UBS Financial Services, Inc. - to 18 months in jail.

Gilabert operated a company called Capital Management Group. He plead guilty in June 2006 to conspiracy to commit mail fraud, wire fraud and securities fraud.

From September 2000 to January 2005, Gilabert collected millions of dollars from more than 40 clients, concealing that he lost most of the money and misappropriated much of the rest, according to court documents.


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