Part of the hedge fund duo who was arrested this summer for growing a year round pot farm in Newtown, Connecticut has pleaded guilty and was sentenced to jail. I first reported in September for Forbes, how Tara Bryson, of Ridgefield-based New Stream Capital, was allegedly cultivating a pot farm in her million dollar mansion while creating an appearance of running a goat farm. A story that caught the financial blog-o-sphere ablaze with shock and awe that a well paid hedge funder would allegedly risk her reputation to make some extra dough selling marijuana with her live-in boyfriend.
Friday, Tara’s boyfriend Michael Anthony Hearl, of 26 Butterfield Rd, pleaded guilty to three of the seven counts the Connecticut state police lobed against him. A Danbury criminal court clerk confirmed the guilty charges included possession with intent to sell, cultivation of marijuana, and possession of a silencer; of which Hearl will serve two out of the four years assigned to jail and then be subject to five years probation.
When Tara and Michael were arrested, a warrant report shows eight guns, locked and loaded, were seized including automatic weapons such as a Glock 40. In an interview with Michael this September he said he had a permit for all of his weapons and the handcuffs Police found belonged to his teenage son – not him.
Police also say they seized 203 marijuana plants of various sized and growth stages. This included a bag containing pot seeds and labeled “blue cheese”. Narcotics detectives on the case wrote it was the enormous electric bill the mansion was generating that helped obtain a search warrant. The bill, which was four times more than comparable neighborhood homes, is in Tara Bryson’s name. She also has sole ownership of the Newtown home where the year round pot farm grew.
In an interview with Hearl after his arrest (with Tara listening in on the conversation) he expressed serious concern regarding how they’ll be able to feed their goats if he has to go to jail and Tara can’t earn money. I asked if they had planned to feed the goats the pot and Hearl answered “oh no never”. Tara and Michael had actually been awarded a $50k grant by the CT department of farming to build a shelter for the goats. I learned the building was never finished and thus the award was never paid out. It’s unclear what has happen to the goats since then.
New Stream, the hedge fund her brother David Bryson co-founded, has since filed for a pre-package chapter 11 bankruptcy. Onshore investors in New Stream are battling the fund managers for control of how the assets will be returned and liquidated. A story I’ve been reporting on for DealFlow media this month. Tara and her brother David have been court ordered to answer investors’ questions about the marketing of the fund. Attorney Edward Toptani and lawyers for Stevens & Lee are currently in the process of an expedited discovery. One in which investors tell me they hope will prove the Brysons lied and misled investors to give millions more to New Stream after Tara and David promised that the fund would be restructured and all investors in the onshore and offshore accounts would have equal claims to asset under management. Big name hedge funds like Gottex and Tradex are now battling each other over who gets the remaning $125 million in assets. At its peak New Stream claimed in press releases the hedge fund had over $800 million in combined assets.
In December 2009, I reported New Stream, along with both Brysons, were being investigated by the FBI for their role in marketing the fund to investors and the firm’s alleged role in overvaluing assets to generate double-digit millions in management fees for themselves. New Stream has now admitted the SEC has joined the investigation and a SEC lawyer even went as far to show up in Delaware bankruptcy court to kindly let the judge know New Stream was not cooperating with the investigation.
What the frustrated investors find through their discovery of New Stream financial documents and depositions might open the kimono for other fraud inside the fund. Something to take note of is the fact Connecticut State police said in Tara’s arrest warrant that no state employment taxes were filed for Tara. But former New Stream staff have confirmed she was an employee of the fund, had an office there, and a day to day role in working with investors to communicate fund performance or calm investors nerves after the fund was gated in 2009 and no one could get their money back. I’ve seen letters to investors written by Tara and even been involved in an interview with her at New Stream’s Ridgefield, CT offices. New Stream has refused to answer if they paid taxes on Tara, who’s six figure income allowed her to buy the million dollar Newtown home. Or if they classified her work as a consultant. Tara’s mortgage documents state she works at New Stream Capital and don’t list her as an independent contractor.
It will be interesting to see if State prosecutors pick up on this possible tax cheat and add it to the drug charges. But what we are most fascinated to hear is her defense in how she didn’t conspire to help grow a pot farm in her own home after her boyfriend has plead guilty of the actions. Unfortunately, without a trial we’ll likely never know.
Editors Note: A special thanks to Curtiss and Andrew at the NewtownBee for being first to report Tara and Michael had been arrested for pot farming. With out their local reporting I might not have seen that a hedge fund executive was involved.
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