Hedge fund founder jailed for Ponzi con
Source: Agencies |
July 23, 2011, Saturday
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Print Edition
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HELMUT Kiener, founder of German hedge fund group K1, was sentenced to 10 years and eight months in prison yesterday for scamming investors out of millions of euros with an elaborate Ponzi scheme.
Kiener - dubbed a German "mini-Madoff" by the international press in reference to US fraudster Bernard Madoff - confessed in April to setting up the con, which prosecutors said cost investors 345 million euros (US$490 million).
The court sentenced Kiener on 86 counts of falsification of documents and 10 counts of fraud and tax evasion.
He said: "I am paying for being able to leave hell and return to purgatory."
The 52-year-old's lawyers had pleaded for a verdict significantly below the 12 years and nine months demanded by prosecutors.
The maximum possible sentence was 15 years.
Authorities said Barclays and BNP Paribas may have lost millions of dollars in the scandal, which spanned the Atlantic and featured lavish personal spending on planes, a helicopter and luxury properties.
The banks made it easy for Kiener to keep up his Ponzi scheme, which was seen as a mitigating circumstance in the trial, judge Volker Zimmermann said.
Kiener duped investors into buying into the funds K1 Global and K1 Invest by pretending they were posting significant profits and would continue to do so, even though both had posted losses, according to prosecutors.
Before the trial, Kiener said: "With hindsight one is always wiser. I don't know what drove me."
The regional court of Wuerzburg also sentenced Kiener's accountant, Claus Zuendorf, to three years and nine months in prison.
Kiener - dubbed a German "mini-Madoff" by the international press in reference to US fraudster Bernard Madoff - confessed in April to setting up the con, which prosecutors said cost investors 345 million euros (US$490 million).
The court sentenced Kiener on 86 counts of falsification of documents and 10 counts of fraud and tax evasion.
He said: "I am paying for being able to leave hell and return to purgatory."
The 52-year-old's lawyers had pleaded for a verdict significantly below the 12 years and nine months demanded by prosecutors.
The maximum possible sentence was 15 years.
Authorities said Barclays and BNP Paribas may have lost millions of dollars in the scandal, which spanned the Atlantic and featured lavish personal spending on planes, a helicopter and luxury properties.
The banks made it easy for Kiener to keep up his Ponzi scheme, which was seen as a mitigating circumstance in the trial, judge Volker Zimmermann said.
Kiener duped investors into buying into the funds K1 Global and K1 Invest by pretending they were posting significant profits and would continue to do so, even though both had posted losses, according to prosecutors.
Before the trial, Kiener said: "With hindsight one is always wiser. I don't know what drove me."
The regional court of Wuerzburg also sentenced Kiener's accountant, Claus Zuendorf, to three years and nine months in prison.
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