U.S. K1 Conspirator Sentenced

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.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Cooper-Hohn Won't Contest Divorce Settlement

Dec 18 2014 | 9:51am ET

The ex-wife of hedge fund billionaire Christopher Hohn will not contest a divorce...

Guest Contributor

Controlling With Confidence: A ‘How-To’ For Hedge Fund Managers

Dec 22 2014 | 11:52am ET

Hedge funds are increasingly turning to third party services to help with operations...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.