NEW YORK — A Czech-born financier dubbed ”the pirate of Prague” was indicted on criminal charges Thursday of allegedly plundering $182 million from a Manhattan-based hedge fund and its clients.<\/p>\n
Viktor Kozeny, once said to be the Czech Republic’s richest man, was charged with grand larceny and possession of stolen property in a 17-count indictment. The charges are the latest in a string of fraud allegations and lawsuits filed against the 39-year-old Harvard-educated financier over alleged emerging-market scams.<\/p>\n
The indictment stems from a complex investment venture that focused on potential privatization of Azerbaijan’s government-owned oil company known as SOCAR. Investors included Omega Advisors, a $3.5 billion Manhattan hedge fund, Columbia University and insurance giant AIG.<\/p>\n
Defense attorney Benjamin Brafman said ”there simply was no theft or fraud” by Kozeny, who remains free at an estate in the Bahamas, one of several luxury homes he owns in the USA and around the globe. Kozeny will review the indictment and then decide whether to return to the USA or fight the case from abroad, Brafman said.<\/p>\n
According to Manhattan District Attorney Robert Morgenthau, Kozeny told investors he would act on their behalf in buying privatization vouchers and related options in Azerbaijan. The purchases would theoretically enable the investors to buy a controlling stake in the state-owned oil giant if rumors of a government sale proved true.<\/p>\n
Prosecutors said Kozeny led investors to believe he would keep millions of his own in the deal. Instead, Morgenthau says, Kozeny used $95 million from Omega to buy out his personal stake, netting a $93 million profit. Kozeny also siphoned $14 million of Omega’s money for personal expenses, including furnishings for his homes in Aspen, Colo., and Lyford Cay in the Bahamas, prosecutors say.<\/p>\n
A New York grand jury is continuing to investigate the disposition of an additional $73 million Kozeny allegedly stole from the hedge fund and its clients.<\/p>\n
Commenting on the case, Omega general counsel Denis Wong said the fund ”is pleased that law enforcement is taking steps to bring Mr. Kozeny to justice.”<\/p>\n
Separately, Czech authorities want to try Kozeny on allegations linked to mutual fund investments he used to launch his fortune before fleeing his homeland.<\/p>\n","protected":false},"excerpt":{"rendered":"
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