Oct. 3–The so-called Pirate of Prague has been put on the plank by a Manhattan grand jury.
Viktor Kozeny, 39, a colorful Czech investment banker, was indicted yesterday on charges he bilked Columbia University, Goldman Sachs and other investors out of $182 million.
Kozeny allegedly blew most of the money supporting his lavish lifestyle, decorating his homes in the Bahamas and in Aspen, Colo., with $3 million worth of furniture, and paying off an $11 million debt to a Moscow bank.
Dubbed by Fortune magazine as the Pirate of Prague, Kozeny was at large last night, believed to be in the Bahamas, where he has a house in Lyford Cay, Manhattan District Attorney Robert Morgenthau said.
Morgenthau added that his office will seek the extradition of the fugitive globetrotter, who is charged with first-degree grand larceny, and possession of stolen property.
Kozeny, who was once president of Harvard Investment Funds, is accused of hoodwinking Omega Advisors, a $3.5 billion hedge fund managed by market wizard Leon Cooperman.
Omega’s investors include Columbia, Goldman Sachs and the Common Fund, a nonprofit investment fund for colleges. Morgenthau said Columbia lost $15 million to Kozeny’s scam.
Kozeny allegedly told Omega money managers he would pool their money with his to buy stock options in the oil industry of the central Asian republic of Azerbaijan, Morgenthau said.
He persuaded the money managers that the deal would make it possible for them to control Azeri, the country’s oil company, once it was privatized.
Instead, Kozeny used $95 million of Omega’s $182 million to buy options he already had purchased for $2 million. Kozeny ended up pocketing $93 million on the scheme, Morgenthau said.
He used $14 million of Omega’s money for personal expenses: $11 million to pay off a bank in Moscow and $3 million for luxury furnishings for his houses.
Morgenthau said $73 million is still unaccounted for. He added that Kozeny is wanted in his home country of Czechoslovakia for pulling a similar scam.
“He’s an expert in privatization, and he’s no longer welcome in Czechoslovakia either,” Morgenthau said.
Kozeny’s lawyer, Benjamin Brafman, said the charges are baseless.
Brafman said Kozeny “never misled any of these sophisticated investors.”
It was unclear yesterday how Morgenthau’s probe fits with an ongoing investigation by federal prosecutors into allegations that tens of millions of dollars from Omega’s investments were used to pay cash bribes to Azerbaijan’s president and son.
Kozeny has testified under oath in the United States that Omega officials knew Swiss lawyer Hans Bodmer was paying the cash bribes.
Bodmer was indicted by a federal grand jury two weeks ago on the bribery charges.
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