Tuesday, 22 July 2014
Last updated 9 min ago
Nov 16 2010 | 2:15pm ET
After more than a year in custody, alleged hedge fund fraudster Helmut Kiener has been formally charged with defrauding investors, banks and brokers of €345 million.
Prosecutors in Würzburg, Germany, slapped the K1 Group founder with 86 counts of forgery, 35 counts of aggravated fraud and one count of tax evasion. Kiener was arrested last October on suspicion of fraud, one of eight K1 employees or associates arrested in the alleged Ponzi scheme.
According to prosecutors, Kiener and K1 ripped off some 5,000 investors as well as its banks, Barclays and BNP Paribas. Kiener denies all of the allegations.
"The investors were allegedly promised substantial profits even though both funds had massive losses," Dietrich Geuder, a spokesman for the prosecutor's office, said. "Pretend profits could only be paid out using newly invested money."
A second suspect in the case, identified as Claus Z., was also charged today. He was a managing director of Treukapital Treuhandverwaltung, K1's administrator.
Z. was one of three previously unidentified people arrested last week as the investigation continues. Two of them, 35 and 80 years old, were managing directors of Treukapital. The other was the auditor of two K1 funds.
Treukapital's David Zuendorf was among the five people arrested earlier. Two Kiener associates have been arrested in the U.S., while the fifth, Dieter Frerichs, former managing director of two K1 funds, committed suicide in July.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…