Submitted by Fox First at Ten on March 8th
LOS ANGELES (AP) - A fugitive German hedge fund manager was arrested Friday at an Italian art gallery on charges filed in Los Angeles that accuse him of orchestrating a stock manipulation scheme that led to at least $200 million in losses to investors across the world.
Florian Wilhelm Jurgen Homm, 53, was captured at the Uffizi Gallery in Florence after being on the lam for five years. Homm has been charged with four counts, including conspiracy to commit wire fraud and conspiracy to commit securities fraud. If convicted, Homm faces up to 75 years in prison.
Homm founded Absolute Capital Management Holdings Limited that managed nine hedge funds between 2004 and 2007. Using a Los Angeles brokerage company he co-owned, Homm directed the hedge funds to buy billions of shares of U.S. penny stocks, according to a criminal complaint.
Homm controlled the trading among the hedge funds and manipulated the market, authorities said.
After allegations were made by a whistleblower in 2006, prosecutors said Homm dumped millions of dollars worth of his own shares, which caused at least $200 million in losses to investors. He and his co-schemers are believed to have profited more than $53 million via trades.
The Securities and Exchange Commission filed a civil lawsuit two years ago in Los Angeles against Homm and four other people, alleging a stock manipulation scheme as part of portfolio pumping plot to increase the value of Absolute Capital.
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