A former Portsmouth investment adviser will serve 18 months in federal prison after pleading guilty for defrauding a client of $2 million dollars. The high-profile case had been scheduled for trial this month.
Prosecutors say former banker Karl Hahn bilked filmmaker Chase Bailey out of $2 million, by persuading Bailey, who considered Hahn a friend, as well as an adviser, to participate in an "off-the-books" investment.
The deal, proposed back in 2009, promised Bailey above market rate returns for making a 90-day loan to 3 individuals. Loans that Hahn assured were secured by property.
There were no loans, and Hahn, who led a lavish lifestyle, used Bailey's money to pay personal expenses.
Along the way, Hahn racked up huge debts, including more than $2 million to Deutsche Bank, which once employed him, as well as back taxes.
Hahn's yacht and the waterfront house he once owned were long ago seized by creditors.
Hahn is scheduled to be sentenced in October. Bureau of Securities Regulation has barred Hahn from selling securities. He's scheduled for sentencing Nov. 8. The terms of the plea require him to serve 18 months in prison.
