Brendan Ross Sentenced to 40 Months in Prison

Brendan Ross, once the darling hedge fund manager of alternative small business lending, has been sentenced to 40 months in prison after pleading guilty to wire fraud. Ross was indicted five years ago in 2020 for a scheme he carried out through his firm Direct Lending Investments.

“Ross allegedly caused the monthly asset values of the funds to be cumulatively inflated by over $300 million over the course of about four years,” the original indictment stated. “By fraudulently inflating the value of the funds, Ross was able to collect millions of dollars in fees he otherwise would not have been able to charge to clients, according to the indictment.”

Ironically, clues about Ross’s scheme surfaced in a 2017 tell-all book authored by an entrepreneur that had borrowed money from his fund. When the author broke the news that his lending business was going bust, Ross reportedly told him: “I am like, literally staring over the edge. My life is over.”

Approximately one year later, Ross resigned from his own firm and the company went into receivership.