K1 Founder Finally Charged In Ponzi Scheme Case

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.


In Depth

Creating An Offshore Hedge Fund Dream Team: The Seven Key Players

Jun 26 2015 | 6:47am ET

If you want to set up an offshore hedge fund, like any great team, you’re only...

Lifestyle

Hedgies Set to Compete in Wall Street Decathlon

Jun 8 2015 | 12:37am ET

The Wall Street Decathlon — a 10-event physical challenge that will crown “Wall...

Guest Contributor

6 Essential Principles To Balance Your Investment Risk

Jun 26 2015 | 10:07am ET

In this article, financial expert Greg Silberman explores how to hedge a private...

 

Editor's Note