The head of a U.S. investment firm who defrauded a bank of more than US$20 million, and caused his investors losses of more than US$8 million, has been sentenced to jail after being convicted on fraud and money laundering charges.
John Arthur Hanratty, the founder and managing director of investment firm Ebury Street Capital, LLC, which ran a portfolio primarily comprised of municipal tax liens, was convicted on charges of wire fraud, bank fraud and money laundering in August 2025.
According to court filings, between 2017 and 2021, Hanratty’s scheme duped a bank by drawing down commercial lines of credit that had been provided to his firm based on false statements about the collateral pledged to that line of credit.
Among other things, he inflated the value of that collateral, and misled both the bank and his investors by falsely claiming that the collateral was managed by an independent third-party custodian.
Ultimately, the fraud resulted in nearly US$20 million of losses for the bank, and Ebury investors also lost more than US$8 million in investment capital when the fraud unravelled and the firm collapsed.
In a U.S. district court in New York Hanratty has now been sentenced to 12 months plus a day in prison, plus two years of supervised release. He was also ordered to forfeit approximately US$17.7 million, “with restitution to follow.”
“John Arthur Hanratty scammed his bank by falsely claiming to own millions of dollars of assets to secure more than $20 million in loan advances,” said Sean Buckley, deputy U.S. attorney for the Southern District of New York (SDNY), in a release. “In reality, the bank was left without the promised collateral and suffered millions in losses.”