Fugitive Czech financier, Viktor Kozeny has been indicted in New York on charges of misappropriating $182 million from clients of NY-based hedge fund firm, Omega Advisors Inc.
Mr Kozeny, who was already being pursued by the Czech authorities following a separate investment scandal there, holds an Irish passport but is currently resident in the Bahamas.
His assets have reportedly been frozen, and a number of pending civil lawsuits against him (filed in the US, the United Kingdom, the Bahamas, and the British Virgin Islands) have been shelved in order to allow this latest criminal trial to go ahead.
According to the Wall Street Journal, which reported on the case last week:
"The indictment cites a string of seemingly sophisticated investors who lost money from Mr. Kozeny's activities in 1998, when he persuaded Omega, headed by prominent investor Leon Cooperman, to invest in vouchers and options in anticipation of the privatization of Azerbaijan's state-owned national oil company. Investors in the Omega funds that lost money include New York's Columbia University, which lost $15 million, and an employee retirement fund of Goldman Sachs Group Inc., which lost $2.8 million."
Although Mr Kozeny told the hedge fund's investors that he was combining their money with his own in order to purchase enough vouchers and options to secure ownership of the state-owned oil company, prosecutors in New York have alleged that he instead used the money to fund his flamboyant lifestyle.
Speaking to the WSJ, Benjamin Brafman, Mr Kozeny's attorney announced that his client "vigorously denies that any investor was deceived or defrauded. Each of the investors in this case were very sophisticated individuals or organizations who did their own due diligence. They knew exactly what they were investing in, and they got precisely what they bargained for."
He went on to suggest that Mr Kozeny had been "victimized".
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