Sandra Steele, Educational Consultant

Former NYU Student Pleads Guilty in Fund Scam

June 6, 2006
by Alan Fein

(AXcess News) New York - Hakan Yalincak, 22, a former New York University student, has plead guilty to bank fraud in a $7 million hedge fund scam that took in cash from unsuspecting investors who thought Yalincak was for real when in fact his Greenwich fund never existed.

Yalincak's defense attorney Bernard Grossberg acknowledged that the fund didn't exist, but Grossberg also said that Yalincak "was a pawn in the game."

The court saw no other players before the bench than the young NYU whiz kid who was charged with passing $43 million worth of bad checks.

Yalincak plead guilt to the bank fraud charges Tuesday. A separate hearing is scheduled for the wire fraud charge, which covered the hedge fund scam.

Prosecutors said the ex-NYU student would lure investors into his phony hedge fund scheme by portraying himself the son of a wealthy Turkish family.

Yalincak, through a plea agreement, faces up to 50 years in prison for bank fraud and wire fraud. The terms of the deal Yalincak's attorney worked out with the court in exchange for his guilty plea was not disclosed.

The ex-NYU student donated $1.25 million of the phony hedge fund's cash to the University to hold up his appearance as a wealthy Turk, the prosecutors said. Yalnicak spent the rest on a lavish lifestyle that included the purchase of a new Porsche.

The University has so far kept the cash Yalincak donated but has said it would return the monies to the court if it the court says it was illegal funds.

The Yalincak Family Foundation has pledged a total of $21 million to NYU, and also awards scholarships, his mother said.

NYU used the $1.25 million to convert the old Bottom Line music hall into the Yalincak Family Foundation Lecture Hall.

Yalincak's mother is also implicated in the hedge fund scheme and awaits trial next month. The ex-NYU student's plea agreement does not cover Ayferafet Yalincak.

His mother allegedly impersonated a doctor in Indiana before the family moved to New York. She supposedly posed as Dr. Irene Kelly, for which she is said to have served time in prison.

Prosecutors said the ex-NYU whiz kid was one of the most adept criminals they ever saw at passing bad checks. "All he needs is a telephone and a computer," prosecutors said in referring to Yalincak as a danger to the community.