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Josh Wander, cofounder of investment firm 777 Partners, has pleaded guilty to wire fraud and securities fraud in connection with a scheme that federal prosecutors said defrauded lenders and investors of at least $500 mn before the company’s collapse, according to US Attorney for the Southern District of New York.
Wander, 45, entered his plea before US District Judge J. Paul Oetken in Manhattan, avoiding a trial scheduled to begin the following week. Under an agreement with prosecutors, he will forfeit at least $500 mn. Each charge carries a maximum prison sentence of 20 years, with sentencing scheduled for March 1.
- Josh Wander, cofounder of 777 Partners, admitted to wire fraud and securities fraud in a scheme prosecutors said cost lenders and investors at least $500 mn.
- The collapse followed allegations involving more than $350 mn in improperly pledged assets, while Bermuda regulators had previously intervened at affiliated reinsurer 777 Re.
- Wander faces up to 20 years in prison on each fraud count and has agreed to forfeit at least $500 mn, with sentencing scheduled for March 1.
Each offense carries a maximum prison sentence of 20 years. Wander is scheduled to be sentenced on March 1, 2027, although the actual punishment will be determined by the court.
The admission follows the collapse of 777 Partners, whose investment activities extended into aviation and professional football, alongside its structured settlement financing operations. The firm was also the ultimate backer of Bermuda-based reinsurer 777 Re, which faced regulatory intervention before ceasing insurance operations in 2024.
Prosecutors detail $500 mn fraud involving 777 Partners’ lenders
The US Attorney’s Office for the Southern District of New York said Wander conducted a multiyear scheme involving fraudulent collateral arrangements, misleading financial disclosures and the unauthorised use of lender funds.
777 Partners initially concentrated on underwriting and financing structured settlements, a business supported by borrowing arrangements secured against settlement-related assets.
As Wander expanded the firm’s investments into new sectors, including airlines and professional sports teams, the company lacked sufficient funds to finance those acquisitions.
Prosecutors said he directed restricted funds obtained from lenders in the structured settlement business toward the firm’s acquisitions and operating expenses, contrary to the terms governing their use.
To obtain financing, Wander pledged hundreds of millions of dollars in structured settlement assets that 777 Partners had either never purchased or had already pledged to other lenders. He also instructed employees to digitally alter bank account statements to show millions of dollars in cash balances that the company did not possess.
As he has now admitted, Josh Wander used his company, 777 Partners, to steal hundreds of millions of dollars from private creditors and investors.
Manhattan US Attorney Jamie McDonald
“Wander double-pledged assets, pledged fictitious assets, lied about the financial condition of his company, and even falsified bank statements, all to gain access to his victims’ funds. He then put those funds to uses that his lenders never permitted, including footing the bill for 777’s collection of professional soccer teams.”
Wander raised more than $200 mn through preferred equity investments
Prosecutors said Wander raised more than $200 mn from outside investors during 2021 and 2022 through the sale of preferred equity interests in 777 Partners and an affiliated entity. He misrepresented the firm’s financial condition when soliciting those investments, according to the Justice Department. The scheme also involved a separate $20 mn loan obtained in March 2022.
Prosecutors said Wander provided the lender with dozens of falsified bank account statements to conceal the misappropriation of funds, including millions of dollars spent on options trading.
By March 2023, questions about the firm’s collateral arrangements had intensified.
One lender confronted Wander over allegations that the same assets had been pledged more than once. Wander falsely attributed the problem to an error involving 777 Partners’ outdated computer system.
Several days later, he again assured the lender that the double-pledging had been inadvertent, according to prosecutors. Wander resigned as chief executive in 2024.
777 Re faced Bermuda regulatory intervention before collapse
The criminal proceedings follow separate regulatory action involving 777 Re, a Bermuda-based reinsurer ultimately backed by 777 Partners.
The Bermuda Monetary Authority intervened at the reinsurer in 2023 after identifying significant concerns involving corporate governance, risk management and decision-making.
The regulator subsequently found that 777 Re had acted contrary to the prudent person principle in its investments in affiliated assets.
The reinsurer also failed to meet enhanced capital requirements after its parent company did not provide contractual capital contributions.
The BMA restricted 777 Re from writing new insurance business and required it to reduce exposure to affiliated investments through asset sales and restructuring.
777 Re ceased conducting insurance business in May 2024, and its Bermuda registration was cancelled in September that year.
The Justice Department’s account of Wander’s criminal conduct focuses on fraud involving 777 Partners’ lenders and investors, rather than identifying 777 Re as a participant in the scheme.
Wander faces sentencing in March 2027
Wander pleaded guilty to wire fraud and securities fraud, with each charge carrying a statutory maximum sentence of 20 years.
The Justice Department said those maximum penalties are established by Congress and do not determine the sentence that Judge Oetken will ultimately impose.
McDonald said the prosecution demonstrated the authorities’ commitment to protecting investors and lenders from financial misconduct.
“This Office, together with our law enforcement partners, will continue to protect investors and lenders and to ensure that those who threaten our financial markets are held accountable,” he said.
Whether perpetrated in the private or public markets, such brazen conduct undermines the integrity of our financial system and will not be tolerated.
McDonald acknowledged the investigative work of the Federal Bureau of Investigation and Homeland Security Investigations, along with assistance provided by the US Securities and Exchange Commission.
The prosecution is being handled by the Southern District of New York’s Securities and Commodities Fraud Task Force.
Assistant US Attorneys Thomas S. Burnett, Marguerite B. Colson, Sarah Mortazavi and Alexandra N. Rothman are responsible for the case.
Wander’s sentencing is scheduled for March 1, 2027, when the court will determine the criminal penalties associated with his guilty plea.
