Mon, Sep 1, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Former hedge fund manager John Tausche gets four and a half years in prison for fraud

Tuesday, September 24, 2013

Precy Dumlao, Opalesque Asia:

Sixty-two year-old hedge fund manager John C. Tausche was sentenced to 4 ½ years in prison in a federal penal colony after he was found guilty of participating in a $311m scheme to defraud his investors.

A report by Philly.com said that Tausche and his co-accused, German national Helmut Keiner, ran the Oceanus Funds from his offices in Wichita, Kansas, and connived to convince investors that Keiner’s K1 hedge funds were making more money than they actually were.

Court records showed that Keiner funneled millions of dollars from K1 into Oceanus, which then returned the money to K1 to give the impression that the K1 hedge funds were expanding in asset size.

Barclays and Bear Stearns invested into the K1 funds; $82m and $137m respectively. Both banks lost all the money.

In its findings, the court determined that Tausche earned $114m from the scheme and ordered him to pay Barclays $115m in restitution.

Kiener has already been tried, convicted and jailed in Germany as a result of the scam, the paper says.

The Federal Bureau of Investigation in Philadelphia originally charged the two business associates with defrauding institutional investors and causing collective losses of more than $311m, on February 7th, 2013. According to the FBI’s ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing
  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing Square, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the

  2. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  3. Hedge fund assets decline in July - eVestment[more]

    Bailey McCann, Opalesque New York: Total assets in hedge funds declined in July and dropped 0.49%, marking the industry's second monthly asset decline in 2014, according to the latest asset flows data from eVestment. Despite the asset decline, total industry AUM remained above the $3 trillion

  4. AIMA makes 'the case for hedge funds'[more]

    Bailey McCann, Opalesque New York: The Alternative Investment Management Association (AIMA), the global hedge fund industry body,

  5. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest