A German hedge fund manager was taken for a ride by her lover, who posed as a wealthy investor, she told a British court.
Talke Stauss, co-founder of hedge fund ATG Investment Managers, said she had fallen in love with Rizwan Butt and was preparing to leave her husband, with whom she set up the firm, when she learned that Butt had defrauded her and ATG of £625,000. ATG had paid Butt the money as a "security deposit" for a potential US$1.5 billion investment—but neither Stauss nor her husband, Roman, who agreed to the transfer, did any background check on Butt.
ATG director Eddie George, however, did, and found that Butt, a former security guard from Manchester, was no millionaire investor: He ran a cleaning company with £657 in assets and lived with his mother.
"You are being conned," Stauss said George told her. "This is a fraud."
Stauss admitted she fell for Butt's two-month "charm offensive," which featured drives in Butt's rented Bentley and meetings at chic London hotels. But when she asked for the money back, Butt fled in his new Audi Q7. He was picked up by the police a month later.
"He said he fell in love with me," Stauss said. "I was then charmed and fell in love with him."
"There was business with ATG and I was dragged into falling in love with him and we were having a love affair. There is a personal relationship and a sexual relationship. There is a difference and it develops slowly."
"I was under additional pressure when he confessed his love," Stauss added. "I reciprocated and regret that very much." As for the "deposit," she said, "he indicated I was a prized possession and would bring success for the company. I gave into the pressure."
Prosecutor Paul Dockery told the jury that Butt "was dishonest from the outset and created an image about himself as being a wealthy, knowledgeable and practiced investor with genuine investment connections. The reality was that he was presenting a false existence in an endeavor to make financial gain whenever he could."
For his part, Butt denies all of the charges, which include fraud, false representation, transferring criminal property and money-laundering. He claims the deal simply fell through because ATG lacked a trading license.