Friday, 6 March 2015
Last updated 8 min ago
Apr 10 2009 | 11:03am ET
An accused hedge fund fraudster who spent five years on the lam before his arrest in 2007 may be released from prison this summer, Austrian prosecutors said.
Michael Berger, who pleaded guilty to securities fraud charges in the U.S. in 2000 but fled to his native Austria two years later. He had faced up to 10 years in prison and a $1.25 million fine.
Berger pleaded guilty to overstating both the performance and asset level of his New York-based Manhattan Investment Fund. More than two-thirds of the $575 million he raised disappeared during the dot-com boom, which Berger bet against from 1996 to 1999.
He was arrested in Austria in the summer of 2007, and has remained in custody ever since. But prosecutors have been unable to prepare charges against him, and say they may be unable to do so by June, the end of a two-year deadline for suspects held in detention without charges. If there are no charges by the deadline, Berger will be released; what’s more, Austrian authorities will be unable to place any travel restrictions on the former fugitive.
Berger could still be charged after the deadline lapses. His lawyer, Jürgen Mertens, told Reuters that his client would not go on the lam again to avoid charges.
“He has realized that his biggest mistake was to run away,” Mertens said. “He’ll definitely face the court.”
Mertens said that his client was tricked into his guilty plea nine years ago, attempting to withdraw the plea in 2001 by claiming he was mentally incompetent at the time. His motion to vacate the plea was dismissed.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…