Approved:

WILLIAM J. STELLMACH
DAVID I. MILLER
Assistant United States Attorneys

Before: HONORABLE RONALD L. ELLIS

Southern District of New

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yo 9 IVL\b
United States Magistrate Judge

SEALED
COMPLAINT
UNITED STATES OF AMERICA
Violations of
15 U:S.C. §§78j (b),
- v. - 78ff; 17 C.F.R.
§ 240.10b-S; and
EZRA LEVY, 18 U.S.C. § 1343 and 2.

Defendant.
COUNTY OF OFFENSE:
NEW YORK AND ELSEWHERE

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SOUTHERN DISTRICT OF NEW YORK, ss.:

\
ROBERT W. MANCHAK, being duly sworn, deposes and says
that he is a Criminal Investigator with the United States
Attorney's Office for the Southern pi strict of New York and
charges as follows:

COUNT ONE

(Securities Fraud)

1. In or about June 2009, in the Southern District of

New York and elsewhere, EZRA LEVY, the defendant, unlawfully,
willfully and knowingly, directly and indirectly, by the use of
means and instrumentalities of interstate commerce, the mails and
the facilities of national securities exchanges, did use and
employ, in connection with the purchase and sale of the common
stock of Atlas Energy ("ATLS") and Atlas Energy Resources
("ATN"), manipulative and deceptive devices and contrivances, in
violation of Title 17, Code of Federal Regulations, Section
240.10b-S, by: (a) employing devices, schemes and artifices to
defraud; (b) making untrue statements of material facts and
omitting to state material facts necessary in order to make the
statements made, in light of the circumstances under which they
were made, not misleading; and (c) engaging in acts, practices and
courses of business which operated and would operate as a fraud
and deceit upon persons and entities.

(Title 15, United States Code, Sections 78j (b) & 78ff;
Title 17, Code of Federal Regulations, Section 240.10b-5,
and Title 18, United States Code, Section 2.)

COUNTS TWO THROUGH ELEVEN

(Wire Fraud)

2. On or about the dates set forth below, in the

Southern District of New York and elsewhere, EZRA LEVY, the
defendant, unlawfully, wilfully, and knowingly, having devised
and intending to devise a scheme and artifice to defraud and to
obtain money and property by means of false and fraudulent
pretenses, representations and promises, transmitted and caused
to be transmitted by means of wire communication in interstate
and foreign commerce, the following writings, signs, signals,
pictures, and sounds for the purpose of executing such scheme and
artifice:

COUNT DATE WIRE

COMMUNICATION
TWO January 5, 2009 $60,000 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
THREE February 2, 2009 $66,666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
FOUR March 2, 2009 $66,666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY

2
FIVE April 2/ 2009 $66/666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
SIX May 1/ 2009 $66/666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
SEVEN June 1/ 2009 $66/666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
EIGHT July 1/ 2009 $66/666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
NINE August 3/ 2009 $66/666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
TEN September 1/ 2009 $66/666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY
ELEVEN October 1/ 2009 $66/666 wire
transfer from a
bank account in
Minnesota to a
bank account in
New York, NY

3
 (Title 18, United States Code, Sections 1343 and 2.)

The basis for my knowledge and the foregoing charge is,

in part, as follows:

3. I am a Criminal Investigator in the Office of the

United States Attorney for the Southern District of New York,
assigned to the Securities and Commodities Fraud Task Force, and
I have been personally involved in the investigation of this
matter. For the past ten years, I have been responsible
primarily for the investigation of offenses involving violations
of the federal securities and commodities laws and related
offenses. I have participated in numerous investigations of such
offenses. Prior to my emploYment at the United States Attorney's
Office, I was a Special Agent with the General Services
Administration and an Investigator with the National Association
of Securities Dealers.

4. The information contained in this Complaint is

based upon my personal knowledge, as well as information obtained
during this investigation, directly or indirectly, from other
sources, as indicated below. Because this affidavit is prepared
for limited purposes, I have not set forth each and every fact I
have learned in connection with this investigation. Where
conversations and events are referred to herein, they are related
in substance and in part unless indicated otherwise. Where
figures and calculations are set forth herein, they are
approximate.

Overview

5. Based on my training and experience, as set forth

more fully below, I believe that there is probable cause to
believe that from in or about January 2009 up to and including in
or about October 2009, EZRA LEVY, the defendant, and others known
and unknown, engaged in at least two schemes to defraud his
employer, a Manhattan-based hedge fund ("Hedge Fund"), of more
than approximately $1.3 million. First, between in or about
January 2009 and in or about October 2009, LEVY diverted
approximately $726,000 owed to the Hedge Fund into a bank account
that he controlled and then utilized that money through ATM
withdrawals, paYments to credit card companies and transfers to a
personal bank account. Second, in or about June 2009, LEVY
caused the Hedge Fund to purchase stocks at inflated prices from
an account that he personally controlled, resulting in a gain for
LEVY, at the Hedge Fund's expense, of more than approximately
$600,000.

4
 Diversion of Funds

6. Based on my discussions with representatives of

the Hedge FundI including the firm/s general partner (the
~General Partner") and my review of transactional documents
I

relating to an investment by the Hedge Fund that is described in

more detail below I learned that:
l

a. At all times relevant to this Complaint the

I

Hedge Fund invested funds on behalf of its

General and Limited Partners.

b. At all times relevant to this Complaint EZRA

I

LEVY I the defendant I was employed at the

Hedge Fund/s headquarters in Manhattan and
served as both the firm/s chief trader and
Chief Financial Officer.

c. In or about November 2008 1 the Hedge Fund

invested in a collateralized note issued by a
company based in Arizona (the ~Issuer").
This investment generated approximately
$66 1 000 per month in interest paYments for
the Hedge Fund.

d. LEVY was the employee at the Hedge Fund

responsible for reconciling the firm/s
monthly accounts and tracking paYments from
entities such as the Issuer.

7. I have also reviewed bank records for an account

held in the name of the Hedge Fund at Washington Mutual Bank (the
"Washington Mutual Bank Account") for the period between in or
about February 2006 and in or about October 2009. From my review
of the bank records and conversations with representatives of the
Hedge FundI I learned that:

a. On or about February 151 2006 1 EZRA LEVY the

I

defendant opened the Washington Mutual Bank

I

Account at a bank branch located in New York l

New York.

b. LEVY was the only signatory on the account.

Based on my discussions with representatives
of the Hedge FundI LEVY did not disclose the
existence of that account to anyone at the
Hedge FundI which maintained its bank
accounts at another financial institution.

5
 c. Between in or about January 2009 and in or
about October 2009, the Issuer each month
wired approximately $66,000 from its bank
account located in Minnesota into the
Washington Mutual Bank Account that LEVY
controlled, located in New York, New York.
In total, the Issuer wire transferred
approximately $726,000 into the Washington
Mutual Bank Account that was owed to the
Hedge Fund.

d. LEVY never informed the Hedge Fund that he

was receiving the monthly installments owed
to the firm, and the Hedge Fund never
authorized him to divert any funds owing to
the firm into any account that LEVY
controlled.

e. Following deposit of those funds, LEVY

withdrew the money from the Washington Mutual
Bank Account through numerous ATM
withdrawals, electronic transfers to various
credit card companies and transfers to a bank
account in the name of "Ezra C Levy or Dyan C
Levy".

f. On or about October 5, 2009, LEVY withdrew

the remaining funds in the Washington Mutual
Bank Account, by wiring the money to an
account in the name of "Ezra C Levy or Dyan
C Levy".

g. The address of record for the Washington

Mutual Bank Account was a "mail-drop"
facility located in Manhattan.

8. Records obtained from the mail-drop fa~ility

indicate EZRA LEVY, the defendant, provided his driver's license
and a credit card in his name as identification when the mail-
drop associated with the Washington Mutual Bank Account was
established. Those records also show that the mail-drop was
established on February 15, 2006, the same day that the
Washington Mutual Bank Account was opened.

Diversion of Funds through Unauthorized Trading

9. During my investigation, I have also reviewed

6
trading records for an account that EZRA LEVY, the defendant,
held at Interactive Brokers (the "Levy Brokerage Account") and
trading records for the Hedge Fund's own trading account ("Hedge
Fund Trading Account"). Based on my review of those trading
records and conversations with the SEC and representatives of the
Hedge Fund, I learned the following:

a. Among other responsibilities, LEVY executed

trades, as directed by the General Partner
and the portfolio manager at the Hedge Fund
(the "Designated Hedge Fund Personnel"), on
behalf of the firm.

b. LEVY was only authorized to execute trades

directed by the Designated Hedge Fund
Personnel; he had no authority to make trades
at his own discretion.

c. On or about June 12, 2009, LEVY purchased,

through the Levy Brokerage Account,
approximately 50,000 shares of Atlas Energy
Resources, whose ticker sYmbol was "ATN", at
an average cost of approximately $22.36 per
share.

d. Fo~lowing those purchases, on or about June

12, 2009, LEVY caused the Hedge Fund Trading
Account to purchase approximately 51,000
shares of ATN at average cost of
approximately $24.93 per share. At least
34,200 of those shares were purchased after
the market's close from the Levy Brokerage
Account at a price of $26.10 per share. On
this day, ATN traded no higher than $22.70
and closed at $22.62.

e. On or about June 15, 2009, LEVY sold

approximately 51,000 shares of ATN from the
Hedge Fund Trading Account at an average
price of approximately $21.36 per share,
resulting in a loss to the Hedge Fund of
approximately $185,000.

f. On or about June 22, 2009, LEVY purchased,

through the Levy Brokerage Account,
approximately 65,000 shares of Atlas Energy,
whose ticker sYmbol was "ATLS", at an average
cost of approximately $15.92 per share.

7
g. Following those purchases, on or about June
22, 2009, after the market's close, LEVY
caused the Hedge Fund Trading Account to
purchase from the Levy Brokerage Account
approximately 112,000 shares of ATLS at
approximately $19.48 per share. On this day,
ATLS traded no higher than $17.21 and closed
at $15.75.

h. On or about June 23, 2009, LEVY sold the

approximately 112,000 shares of ATLS from the
Hedge Fund Trading Account at approximately
$15.69 per share, resulting in a loss to the
Hedge Fund of approximately $427,000.

i. No one at the Hedge Fund authorized, or at

the time was aware of, LEVY's trading in ATN
and ATLS on behalf of the firm.

8
 j. On or about October 21, 2009, LEVY approached
the General Partner and stated, among other
things, that:

i. LEVY had received a subpoena from the

SEC seeking production of his personal
trading records;

ii. LEVY held brokerage accounts that he had

not disclosed to his employer; and

iii. LEVY had traded certain stocks in those

accounts which were part of the SEC's
investigation.

WHEREFORE, deponent prays that an arrest warrant be

issued for the above-named defendant and that he be imprisoned or
bailed as the case may be.

Due to the ongoing nature of this investigation, I

request that this Complaint and any arrest warrant issued on it
be filed under seal.

~L.-1-tv-~
ROBERT W. MANCHAK ~.
CRIMINAL INVESTIGATOR
OFFICE OF THE UNITED STATES ATTORNEY
FOR THE SOUTHERN DISTRICT OF NEW YORK

s~n to before me this

~ day of November, 2009

,@/f-~ t«lV 0 9 211\9,

RONALD L. ELLIS
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK