Hedge Fund Founder Still On The Lam In Canadian Fraud Case

Mar 14 2011 | 12:59pm ET

The founder of collapsed Canadian hedge fund Norshield Financial Group remains a fugitive in a fraud case involving a children's television production company.

John Xanthoudakis is still being sought by police almost two weeks after he and three others were charged with running a C$120 million fraud. The third man accused in the case, Ronald Weinberg, co-founder of the production company Cinar, was arrested Thursday on his return to Montréal from a vacation in the Dominican Republic.

Weinberg was freed on C$140,000 bail and will be free to travel between Canada and the U.S., where he has a home on Long Island.

Xanthoudakis is accused of helping the other three accused fraudsters by illegally investing Cinar funds with the hopes of reaping the profits for themselves from 1998 to 2000.

The alleged Cinar fraud is the second time that Xanthoudakis has found himself in trouble with the law. Last year, he and Norshield president Dale Smith were fined more than C$2 million each and barred from the securities industry for misleading investors in the hedge fund. Norshield collapsed almost six years ago, costing investors some C$159 million.

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