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Hedge Fund Executives Charged In $300M Fraud Scheme

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PHILADELPHIA (AP) — Federal prosecutors in Philadelphia say that two hedge fund executives have been charged in a scheme that defrauded institutional investors of more than $300 million.

An indictment filed Thursday says that Helmut Kiener, a 53-year-old German billionaire who founded the hedge fund group K1, partnered with a North Carolina man to swindle Barclays Bank, Bear Stearns and BNP Paribas. Court documents say Kiener used some of his ill-gotten gains to buy oceanfront real estate in Florida, an executive jet, a helicopter, luxury cars and boats.

Kiener was convicted of similar charges in Germany in 2011. He was sentenced to more than 10 years in prison.

Sixty-one-year-old John Tausche of Blowing Rock, N.C., was charged with bank fraud and money-laundering. His lawyer says he’s cooperating with the government.

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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