Norshield Founder Arrested In Fraud Case

Mar 15 2011 | 12:55pm ET

John Xanthoudakis, the former hedge fund honcho accused of masterminding a C$120 million fraud, has been arrested.

The fourth and final suspect in the case to be apprehended, Xanthoudakis was taken into custody at Montréal's Pierre-Elliott-Trudeau International Airport this morning upon his return from Bermuda. He is set to appear in court this afternoon.

Two weeks ago, prosecutors in Québec charged Xanthoudakis, the former president of collapsed hedge fund Norshield Financial Group, with 36 counts of fraud and forgery. According to the authorities, Xanthoudakis and Ronald Weinberg, president of Canadian children's television production and animation company Cinar, set up a scheme to illegally invest Cinar's capital in Norshield to reap the profits for themselves and for two other alleged co-conspirators. The plan backfired when Norshield collapsed in 2005, leading Cinar shareholders to sue the defunct hedge fund.

Norshield's collapse cost investors some C$159 million.

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