Fund Founder Who Suspected ‘Misconduct’ Charged With Fraud (1)

Brendan M. Ross said in February 2019 that the loan default blamed for upending his $1 billion investment fund was “very likely the result of misconduct, but we haven’t determined by whom.”

On Tuesday, federal prosecutors said they’d figured it out. Ross, 47, was arrested on charges he’d falsified records to inflate the value of funds at Direct Lending Investments LLC, the Glendale, California, fund he’d founded in 2012. Ross’s actions allowed him to collect millions of dollars in fees he wasn’t entitled to from late 2013 to early 2019, the government said in a statement.

Direct Lending, ...