German Hedge Fund Fraudster Charged In U.S.

Feb 8 2013 | 4:22am ET

Hedge fund fraudster Helmut Kiener has already been sentenced to nearly 11 years in prison in Germany. If American prosecutors get their way, it will be followed by as many as 200 more behind bars on the other side of the Atlantic.

The U.S. Attorney's Office in Philadelphia announced yesterday that Kiener had been indicted for defrauding Bear Stearns of $311 million. According to prosecutors, Kiener and an American co-conspirator funneled investment funds from Bear to an entity controlled by the co-conspirator, John Tausche, telling Bear that the funds were diversified and independently managed.

The alleged fraud cost Bear about $82 million, prosecutors said.

Tausche, who is cooperating with authorities, is accused of running a similar scam against Barclays using Kiener's K1 Group hedge funds. Kiener admitted to defrauding K1's banks, principally Barclays and BNP Paribas, as well as the hedge fund's investors, of €345 million.

If convicted, Kiener faces up to 200 years in prison. Tausche faces up to 40.


In Depth

Israeli Hedge Fund Harnesses Big Data

Jul 28 2014 | 8:10am ET

Apica Green is a multi-million dollar Israeli hedge fund that is based in Tel Aviv...

Lifestyle

David Yarrow On Growing His Hedge Fund And Shooting The Animals And People Of Africa - As A Photographer

Jul 23 2014 | 6:44am ET

While he’s always been a photographer, recent expeditions to Iceland, Ethiopia...

Guest Contributor

Why Is The Shipping Industry Underwater?

Jul 31 2014 | 7:31am ET

Anyone who’s taken a look at the global shipping industry recently probably knows...

 

Publisher's Note