Tuesday, 26 July 2016
Last updated 9 hours ago
Sep 24 2013 | 9:43am ET
A U.S. hedge fund manager who pleaded guilty in the K1 Group fraud has been sent to prison for his role in defrauding investors of more than $300 million.
John Tausche was sentenced to four-and-a-half years in prison and ordered to pay $115 million in restitution to Barclays, one of the largest victims of K1 founder Helmut Kiener's scam.
Tausche ran the Wichita, Kan.-based Oceanus Funds. Prosecutors say that Kiener used those vehicles for a series of roundtrip payments that made it appear that K1 was growing, when in fact Oceanus was simply returning money that K1 had sent it. Tausche also gave both Barclays and Bear Stearns false financial information, leading the to banks to offer K1 more than $200 million in financing.
Tausche's cut from the fraud was about $114 million, prosecutors said. He cooperated in the investigation.
Kiener was convicted in 2011 and sentenced to nearly 11 years in prison in Germany.