K1 Group founder Helmut Kiener, who was convicted in Germany
of defrauding investors in a Ponzi scheme, was indicted by the U.S. for his
role in a $311 million fraud, the U.S. attorney in Philadelphia told Bloomberg.
Kiener, a German national, was charged today with four
counts of wire fraud, two counts of bank fraud and three counts of money
laundering based on allegations that he devised a scheme to defraud Bear
Stearns Cos. using hedge funds in the Bahamas and the Cayman Islands. Kiener’s
partner John Tausche, 61, of Blowing Rock, North Carolina, was charged with one
count of bank fraud and one count of money laundering.
Kiener, 53, was convicted in 2011 and sentenced to 10 years
and eight months in prison after confessing to using new investors’ money to
make up for losses in the wake of the financial crisis. K1’s funds are being liquidated in the
British Virgin Islands. Kiener’s personal assets were placed in insolvency
proceedings in Germany, where he is incarcerated.
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