K1 Fraudster Gets More Than 10 Years

Jul 22 2011 | 12:41pm ET

Three months after his surprise confession, K1 Group founder Helmut Kiener was formally convicted of running a €345 million Ponzi scheme.

Kiener, who had loudly, repeatedly and, at times, threateningly, proclaimed his innocence since his arrest in 2009, was ordered jailed for 10 years and eight months by the Würzburg, Germany, court. K1's accountant, identified only as Claus Z., was also convicted and sentenced to three years and nine months in prison.

"Kiener's system only worked as long as he managed to acquire fresh funds," the court ruled. "His investors' chance to earn any return was almost zero. The case is extraordinary because of its size and the number of cheated investors."

Prosecutors say Kiener defrauded some 5,000 K1 clients, as well as its banks, Barclays and BNP Paribas, which lost €223 million on the scheme.

"My problem was that I didn't have the courage to end it all earlier," Kiener said after the sentencing. "Now I have to pay for it."

Kiener's lawyer said his client would not appeal, and that he was pleased that the sentence was two years and one month less than that sought by prosecutors.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

A Hard Look At Your ‘Soft’ Hedge Fund Marketing Information

Dec 8 2016 | 9:03pm ET

Conventional wisdom holds that due diligence examines quantitative as well as qualitative...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR