Marble Ridge Capital founder Dan Kamensky pleaded guilty to fraud, five months after he was charged in New York with abusing his position on a Neiman Marcus Group Inc. bankruptcy committee to purchase assets at an artificially low price.

Kamensky, 48, of Roslyn, New York, was charged by federal prosecutors in Manhattan in September with pressuring a rival to abandon a higher bid for Neiman Marcus assets so Marble Ridge could get them cheaper. The luxury department store chain filed for Chapter 11 bankruptcy protection in May and Kamensky was a member of a committee of unsecured creditors. He faces as long as five years in prison at his sentencing, which is scheduled for May 7.

Even in contentious bankruptcy cases, where creditors and debtors often exchange charges of bad faith and unfair deal-making, it is rare for criminal charges to be filed.

In a hearing last year before a bankruptcy judge in Houston who referred Kamensky to federal prosecutors, the judge criticized the investor in unusually personal language, at one point calling him a thief “of the lowest character.”

A day after Kamensky’s arrest, the bankruptcy judge approved a plan that handed ownership to Neiman Marcus creditors in return for forgiving about $4 billion of the chain’s $5.5 billion in borrowings.

“Daniel Kamensky abused his position as a committee member in the Neiman Marcus bankruptcy to corrupt the process for distributing assets and take extra profits for himself and his hedge fund,” Acting Manhattan US Attorney Audrey Strauss said in a statement Wednesday.

Kamensky’s lawyers didn’t immediately respond to an email seeking comment on the plea.

New York-based Marble Ridge was founded in 2015 by Kamensky, a former partner at hedge fund Paulson & Co. who started his career as a bankruptcy attorney. The firm specialised in distressed debt investments and the restructuring of troubled issuers.

Marble Ridge shut down and started returning money to investors in August after a US government investigation found Kamensky, its managing partner, at fault for trying to interfere with Neiman’s auction of assets in bankruptcy.

Kamensky was accused of securities fraud, extortion and obstruction for pressuring an investment bank to drop its plan to outbid Marble Ridge for a stake in Neiman’s Mytheresa unit during the luxury retailer’s bankruptcy, and then seeking to cover it up.

Creditors were demanding a piece of Mytheresa to compensate for their losses and counting on Kamensky to help get the highest return for everyone. US officials claim Kamensky sought to take advantage of his role to benefit his portfolio at the expense of the other creditors.

As part of a separate settlement with the US trustee, an arm of the Justice Department that monitors corporate bankruptcies, Kamensky agreed to pay $1.4 million to cover attorney fees related to the investigation of his conduct and agreed not to try to collect any debt Neiman Marcus may owe him until other creditors are repaid. He also agreed to make $100,000 in charitable donations and perform 200 hours of community service. Kamensky has agreed never to serve on another official bankruptcy committee.

By Chris Dolmetsch, Katherine Doherty and Steven Church