Mark Varacchi

Mark Varacchi
Born:
Charges:	Securities fraud, Wire fraud, Conspiracy to commit securities fraud and wire fraud
Sentence:	15 months federal prison
Facility:
Status:	Released

Mark Varacchi is an American former hedge fund executive turned fraud prevention speaker and federal prison consultant. After over twenty years in the hedge fund and private equity industry, including positions at Tiger Management and Diamondback Capital Management, Varacchi pleaded guilty in 2017 to securities fraud and wire fraud related to the misappropriation of investor funds at his firm, Sentinel Growth Fund Management. Following fifteen months in federal prison, Varacchi founded Federal Prison Consultancy and began speaking to compliance professionals, financial institutions, and law enforcement about fraud prevention techniques.

Current Work

Federal Prison Consultancy

Varacchi founded Federal Prison Consultancy to assist federal defendants and their families in navigating the criminal justice system. The consultancy provides services that Varacchi describes as addressing matters that law school does not teach, including presentence investigation report preparation, cooperation strategy, prison facility designation advocacy, and family readiness planning.

Services offered by Federal Prison Consultancy include:

• Presentence investigation (PSI/PSR) review and customized additions
• Sentencing preparation for defendants and family members
• Prison facility designation discussion and advocacy
• Medical record review and prescription evaluation
• Assistance with Bureau of Prisons administrative filings (BP-8, BP-9, BP-10 forms)
• Monthly newsletters on BOP policy changes
• Credit monitoring and repair assistance

The consultancy employs advisors from various backgrounds who have personal experience with the federal prison system, including team members who can provide guidance in multiple languages including Chinese, Russian, Spanish, Albanian, and Hebrew.

Fraud Prevention Speaking

Varacchi speaks to compliance professionals, financial institutions, law enforcement agencies, universities, and law schools about financial fraud techniques and prevention strategies. His presentations draw on his experience building and then exploiting financial systems, covering topics including anti-money laundering (AML), know-your-customer (KYC) compliance, game theory applications in fraud prevention, and the impact of artificial intelligence on financial crime.

Varacchi has spoken to Association of Certified Fraud Examiners (ACFE) chapters, including presentations titled "I Ran a Ponzi Scheme (So You Don't Have To): An Insider's Guide to Fraud Prevention and Risk Mitigation." He has received positive reviews from ACFE chapter leadership for his fraud prevention insights.

A distinctive element of Varacchi's speaking work involves data compiled from interviews with hundreds of financial criminals. Through his prison consultancy work and his time incarcerated, Varacchi has gathered information about fraud patterns and techniques that he states is not available through conventional research.

Expert Witness Services

Varacchi provides expert witness services related to financial fraud, compliance, and ethics matters.

Criminal Case

Sentinel Growth Fund Management

Varacchi co-founded Sentinel Growth Fund Management LLC, which operated offices in Stamford, Connecticut and New York City. Sentinel managed two hedge funds, Radar Alternative Fund LP and Radar Alternative Master Fund SPC.

Charges and Guilty Plea

On February 1, 2017, Varacchi pleaded guilty in the U.S. District Court for the Southern District of New York to securities fraud, wire fraud, and conspiracy to commit securities fraud and wire fraud. According to the SEC complaint filed the following day, Varacchi and Sentinel misrepresented to investors that money deposited with the firm would be allocated to emerging hedge fund managers for investment purposes. Instead, Sentinel and Varacchi commingled investor assets and manipulated account activity.

In his guilty plea, Varacchi admitted to misappropriating funds provided by investors for the purchase and sale of securities, then obtaining funds from other investors to make payments to earlier investors whose funds had been misappropriated. The SEC alleged that $3.95 million was stolen from investors.

Varacchi also admitted to having schemed to defraud a prior employer, a New York-based hedge fund, by embezzling money and taking kickbacks from vendors who submitted inflated invoices. In April 2016, Taran Asset Management LLC had sued Varacchi, its former chief operations officer, accusing him and a risk management service provider of embezzling $980,000. That lawsuit was settled in June 2016.

Connection to Hamilton Ticket Scheme

The Sentinel fraud case was connected to a larger scheme involving the resale of tickets to the Broadway musical Hamilton and other entertainment events. Co-conspirators Joseph Meli and Steven Simmons had raised money from investors, including billionaires Paul Tudor Jones and Michael Dell, by claiming they would purchase and resell tickets to popular shows. More than 125 investors put approximately $81 million into what they believed was a legitimate ticket resale business.

Cooperation with Authorities

As part of his plea agreement, Varacchi agreed to cooperate with federal authorities. His cooperation included recording conversations with co-conspirator Joseph Meli, which became part of the evidence against Meli. The FBI also relied on interviews with Varacchi to build a case against Jason Rhodes, another Sentinel co-founder who was later charged with defrauding 25 investors of more than $19 million.

Sentencing and Incarceration

Varacchi was sentenced to fifteen months in federal prison. In interviews, Varacchi has described experiencing a period of approximately six and a half years between his initial cooperation with authorities and his sentencing, which he characterizes as its own form of punishment.

Civil Judgment and SEC Action

On May 1, 2017, the U.S. District Court for the District of Connecticut entered a judgment against Varacchi and Sentinel Growth Fund Management, permanently enjoining them from violations of securities laws. The court also entered judgment against the Radar Alternative Fund LP and Radar Alternative Master Fund SPC and appointed a receiver to oversee assets of Sentinel and the Radar Funds.

Co-Conspirator Outcomes

Steven Simmons of Wilton, Connecticut was sentenced to 37 months in federal prison in April 2018 for his role in the scheme, ordered to forfeit $6.9 million, and required to pay restitution to victims. Joseph Meli pleaded guilty in October 2017. Jason Rhodes was sentenced to four years in prison in September 2021 for defrauding investors of approximately $20 million.

Career Background

Prior to founding Sentinel, Varacchi spent over twenty years in the hedge fund and private equity industry in senior operations and management roles.

Varacchi worked at Tiger Management and held senior operations positions at Diamondback Capital Management. From 1999 to 2001, he sat directly on the trading desk at a hedge fund with over $4 billion in assets under management that was later involved in what has been described as the largest insider trading case in history.

Additional positions in Varacchi's career included serving as COO of a USA/International Equity Fund for over four years, managing trades, swaps, options, and contracts for difference (CFDs) across Europe, the United Kingdom, and the United States. He also worked as an internal control accountant at Bear Stearns.

Varacchi holds a Bachelor of Science degree in Finance.

Media Appearances

Varacchi has appeared on multiple podcasts discussing his criminal case, fraud prevention, and prison consulting work, including:

• Nightmare Success In and Out with Brent Cassity (August 2024)
• Fraudish podcast (November 2024)
• A Study in Crime podcast (April 2025)

See also

• Securities fraud
• Ponzi scheme
• Federal prison consulting
• Anti-money laundering

External links

• Mark Varacchi official website

References

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