Former Chicago hedge fund director pleads guilty in multi-million dollar fraud case

August 24, 2011

The Associated Press

A former hedge fund director has pleaded guilty to swindling about 900 investors around the world out of $294 million.

Federal prosecutors say 46-year-old Philip Baker entered guilty pleas Wednesday in Chicago to wire fraud charges. He was to go to trial next month.

Baker controlled Chicago-based Lake Shore Group of Cos. and authorities accuse him of trading client money in commodity futures pools.

As part of a plea agreement Baker must pay more than $154 million in restitution. Prosecutors will recommend the maximum term of 20 years.

Baker, a Canadian citizen, was extradited in 2009 from Germany. The same year he was indicted on 27 counts.

The fraud was revealed in 2007 when the U.S. Commodities Futures Trading Commission filed suit against one of Baker's companies.