K1 founder charged with fraud for Ponzi scheme

HELMUT Kiener, founder of German hedge fund group K1, is being charged with fraud, forgery of documents and tax evasion more than a year after he was arrested in a multi-million-dollar investigation.

He is accused of having swindled investors out of about €345m (£293.6m) with an elaborate Ponzi scheme, the public prosecutors’ office in Wuerzburg, Germany, said in a statement yesterday.

Kiener was arrested in October 2009 as authorities said Barclays and BNP Paribas may have lost millions of dollars in the case, which prosecutors said spanned the Atlantic and featured lavish personal spending on planes, a helicopter and luxury properties. Investors were duped into investing in funds K1 Global and K1 Invest by pretending the funds were posting significant profits and would continue to do so, even though both of them had suffered “massive losses”, the prosecutors’ office said.