K1 Manager Frerichs Killed Himself to Escape Arrest

Dieter Frerichs, a suspect in an international investigation into hedge-fund firm K1 Group, shot and killed himself to avoid arrest, Spanish police and German prosecutors said.

Frerichs was a managing director of two British Virgin Island-based K1 investment funds, which were part of a scheme to defraud banks and thousands of private investors of more than 300 million euros ($376 million), said prosecutors in Wuerzburg, Germany. The prosecutors had sought extradition of Frerichs, 72, who was staying in Palma on the Spanish island of Mallorca. They said he committed suicide today in an e-mailed statement.

Police officers arrived at Frerichs’ house in Palma at 11.30 a.m. on July 3, where they found him sunbathing, a local police spokeswoman said in a telephone interview today. He took out a firearm from his bag and jumped into the sea, she said, declining to be identified in line with official policy.

After the damp weapon failed to fire several times, Frerichs shot himself in the head with his second successful discharge, the spokeswoman said. Frerichs was taken to a hospital where he later died, she said.

K1 Group is at the center of an international criminal probe after saddling banks including Barclays Plc, JPMorgan Chase & Co. and BNP Paribas SA with losses. European and U.S. authorities are investigating whether K1 founder Helmut Kiener, who helped manage funds of hedge funds, deceived the banks when he borrowed money. Kiener, who was arrested in October, previously denied the charges. His lawyer, Lutz Libbertz, didn’t immediately respond to an e-mailed request for comment.