The Rocky Mountain News has more news about Kirk Wright and International Management Associates on March 4, 2006 in an article written by James Paton entitled Fund Chief's Troubles Escalate. According new court papers referenced in this article, Kirk Wright, the Harvard-educated hedge fund manager who was the head of International Management Associates, the hedge fund firm accused of swindling hundreds of investors, including three former Denver Broncos player and one of the team’s active wide receivers, Rod Smith, has also stiffed his ex-wife to the tune of approximately $1 million. Kirk Wright supposedly never paid the sum he owed his former wife, Kasandra Pantoja, as part of their divorce settlement from when they officially split up in April 2005. Also as part of the divorce decree, Wright separately was obligated to pay $20,500 a month for child support and alimony to support his ex-wife and their four children, the court documents state. While in previous months he had paid ahead of time, he typically was short $500 per month accord to the court records. Then,

On Feb. 20, an apparent child-support and alimony payment was made in odd fashion. A "mysterious" package stuffed with $30,000 in cash was dropped off at the front door of his ex-wife's grandfather, her lawyer said. Wright phoned former wife Kasandra Pantoja that day to say he wanted to "keep his end of the bargain," according to the documents, added to the file in the Securities and Exchange Commission's case against the hedge fund.

Her lawyer, Donald Weissman, opened the envelope. "We had no way of knowing what was in it," he said. "We had read the stories and knew that his hedge fund business had largely collapsed." Weissman wrote in a letter to Judge Jackson Bedford of Fulton County Superior Court in Georgia that he believed it was his "duty" to report the details. Wright, who received degrees from the State University of New York at Binghamton and from Harvard University, started the firm in 1996, according to his online bio. He also previously had been vice president of the global consulting practice at Kaiser Associates, according to the Web site. The hedge fund manager said he had a net worth of more than $10 million at the time of the divorce settlement last year, Weissman said.

There no doubt will be much more news to come regarding this fraud story about Kirk Wright and International Management Associates. Toomre Capital Markets LLC cannot stress enough the importance of reviewing independent auditor reports before investing in any hedge fund. Sadly, in this case, approximately 500 investors are finding out the hard way that due diligence needs to be performed before investing and at least every year thereafter, not after the cow has left the proverbial barn.

Toomre Capital Markets LLC has also posted on this fraud by Kirk Wright and International Management Associates in posts here, here and here. Thoughts and comments are welcome.