The fugitive German hedge fund manager who more than five years ago fled the Spanish island of Mallorca with $500,000 hidden in his underwear and luggage was charged with securities and wire fraud.
A federal grand jury in Los Angeles, California, charged Florian Homm, 53, in a 10-count indictment, U.S. Attorney Andre Birotte Jr. said today in an e-mailed statement.
Homm was arrested by Italian police on March 8 in Florence, Italy, at the Uffizi Gallery, the world-famous museum that houses Sandro Botticelli’s “Birth of Venus” and Leonardo da Vinci’s “Annunciation.”
Homm is accused of defrauding investors in hedge funds he controlled, causing $200 million in losses. He is charged with one count of conspiracy, eight counts of securities fraud, and one count of wire fraud in an indictment filed yesterday, which replaces an earlier criminal complaint, according to the statement.
The founder and former chief investment officer of Cayman Islands-based Absolute Capital Management Holdings Ltd. is accused of “cross trading” billions of shares of penny stocks between the company’s funds to boost the value of the otherwise illiquid securities.
The trades, through a Los Angeles-based broker-dealer that Homm co-owned, generated fees for Homm and Absolute Capital and also inflated the price of Absolute Capital’s shares, prosecutors said. Homm sold his shares and resigned from Absolute Capital on Sept. 18, 2007, according to the statement.
Homm is still in Florence awaiting extradition. There is no date set for those proceedings.
Homm doesn’t have a lawyer yet in the criminal case, according to Stephen Cazares, an assistant U.S. attorney in the case.
The case is U.S. v. Homm, 13-MJ-00740, U.S. District Court, Central District of California (Los Angeles). The SEC case is Securities and Exchange Commission v. Ficeto, 11-cv-01637, U.S. District Court, Central District of California (Los Angeles).
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