CSA fraudster's dummy company scheme unveiled

Charles Schmitt, who is reportedly in the custody of Hong Kong police, is alleged to have been defrauding investors in a fund of hedge funds managed by Charles Schmitt & Associates since the establishment of the vehicle, the CSA Absolute Return Fund, in 2002. The alleged fraud was not picked up by the firm's auditor, Ernst & Young, nor by its fund administrator, Bank of Bermuda (since acquired by HSBC) - but by his own senior managers.