(Adds sums recovered, defendant's custodial status)
By Jonathan Stempel
Jan 29 (Reuters) - A Venezuelan financier was sentenced on Thursday to 13 years in prison for running what U.S. prosecutors called a Ponzi scheme in Connecticut that caused $382.2 million of losses, including for Venezuela's state-owned oil company.
Francisco Illarramendi, 45, was sentenced after having pleaded guilty in March 2011 to five criminal counts including securities fraud, wire fraud and conspiracy to obstruct justice and defraud the U.S. Securities and Exchange Commission.
The sentence was imposed by U.S. District Judge Stefan Underhill in Bridgeport, Connecticut. Prosecutors sought at least a 12-year prison term.
Illarramendi had requested no more than six months of home confinement. He has been in custody since bail was revoked in January 2013. A court-appointed receiver has recovered more than $300 million for fraud victims.
The defendant's lawyer Stephan Seeger said in a phone interview that the sentence was calculated incorrectly, and that most of the alleged losses "have been or can easily be" recouped.
"Our wholehearted intention is to appeal the sentence," Seeger said. "While the government has hailed it as the biggest Ponzi scheme in Connecticut's history, it is the only alleged Ponzi scheme in the universe with a surplus."
The son of a Venezuelan diplomat, Illarramendi worked for Credit Suisse from 1994 to 2004, and then took a sabbatical to advise Venezuela's state-owned Petroleos de Venezuela SA (PDVSA).
He then left Credit Suisse to become a hedge fund adviser, and in 2006 founded Michael Kenwood Group LLC, in Stamford, Connecticut.
U.S. authorities said it was there that the married father of two ran his fraud, which began as an effort to conceal a $5 million loss on a bond transaction.
According to prosecutors, Illarramendi lied to his investors, bribed Venezuelan officials who helped steer $100 million of PDVSA money to him, and pursued a series of "Hail Mary" transactions to conceal mounting losses.
Prosecutors also said Illarramendi diverted more than $20 million to fund his lavish lifestyle, including a home so big that the electronic monitor used by probation officials to track his movement "was insufficient to cover the entire expanse."
Seeger had said the fraud was coerced by unnamed corrupt Venezuelan officials, leaving Illarramendi no alternative that would keep his family safe.
Illarramendi's bail was revoked after the court learned he had spent much of an undisclosed $630,000 state tax refund.
The receiver has said he hoped to repay many fraud victims about 92 cents on the dollar.
The case is U.S. v. Illarramendi, U.S. District Court, District of Connecticut, No. 11-cr-00041. (Reporting by Jonathan Stempel in New York; Editing by Christian Plumb)