James Marquez may have proved once again what Abraham Lincoln so famously said, “You can fool all the people some of the time.” Marquez, the founder of the failed Bayou Group, named for the well-known region of his home state of Louisiana, is set to go to jail for five year after pleading guilty to planning a scam that defrauded investors of his $350 million Connecticut-based hedge fund. According to The New York Post, which says it has done some digging on the matter, there was a lot less to Marquez’s “whiz kid” reputation than met the eye. The Post reports that his Bayou debacle was just the latest in a string of failures in a career dotted with instances of major losses. It’s just that Marquez did a good job of covering them up. Marquez, says the Post, was a George Soros’ right-hand man at Soros Fund Management, and yet when he moved to rival Michael Steinhardt’s Steinhardt Partners, according to an official of the firm, “He lost a lot of money, and at our shop, that equaled a ticket out.” From there, Marquez formed JGM Management, and signed on Sam Israel and Dan Marino, with whom he had worked earlier at F.J. Graber & Co. But despite Marquez reputation, the firm closed after less than a year and a half after losing 65% of its assets. Enter Bayou in 1996--and the rest is history. According to The Post, after two years of double-digit losses, Marquez plotted the scam and assigned major roles to his partners in Israel to monitor risk and Marino to set up a fake accounting firm. Marquez reportedly is getting off pretty easy with a five-year sentence. He could have faced a longer prison term had he gone to trial where a mountain of evidence could have put him away for a lot longer.
