Former trader charged with defrauding bailout fund

NEW HAVEN, Conn. (AP) — A former managing director has been indicted on charges he defrauded investment funds the Department of Treasury established in 2009 as part of the federal government's response to the financial crisis.

The U.S. Attorney's office said Monday a federal grand jury in New Haven returned a 16-count indictment charging 38-year-old Jesse C. Litvak of New York City with securities fraud, Troubled Asset Relief Program fraud and making false statements to the federal government.

The indictment alleges Litvak, while a registered broker-dealer and managing director at Jefferies & Co., Inc., engaged in a scheme to defraud customers on residential mortgage-backed securities trades.

Authorities say Litvak defrauded six funds that were funded principally with government bailout money and private investment funds of more than $2 million.

Litvak's attorney said he did not cheat anyone.