Posts tagged “tax evasion”

Is Hell Too Good for Andrew Stein?

December 3rd, 2010

Andrew Stein

Perhaps the hottest seat in hell is resolved for those elected officials who plough the public trough with such firmness, such a single concentrated focus of mind that his eventual discovery and arrest qualify for a Greek tragedy. Hell’s hot seat is awaiting Andrew Stein, the former New York City official and associate of fraudster Kenneth Starr, who has pleaded guilty to tax evasion.

On this earth, Stein faces up to one year in prison on the misdemeanor failure to pay income taxes count. He was accused of not paying taxes for the year 2008; he was not charged in the Starr case despite allegations that Starr spent some of the up to $50 million he stole on Stein’s “extravagant personal expenses.” In the nether plains, Stein will be doing the bidding of Beelzebub, teaching inmates the glories of greed and avarice.

Starr pleaded guilty to ripping off his clients, including an unidentified hedge fund manager and several Hollywood luminaries, in September. Starr allegedly moved investor money through a shell company set up by Stein, Wind River LLC. Notice how you can’t have a shell company without “hell’?

At his own plea hearing Wednesday, Stein cleverly admitted that he “stupidly did not pay the taxes” for 2008, when he “had taxable income in excess of $1 million,” according to the charge. The devil has many attributes, but stupidity is not high among them.

“I was wrong, your honor,” Stein, who served both as Manhattan borough president and president of the New York City Council, told U.S. Magistrate Judge Ronald Ellis. “I take full responsibility for it.” Oh will he ever!

Stein was released on his own recognizance, pending his sentencing. Don’t expect him to visit any churches during his release, unless of course Lucifer bids him to burn them down.

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Herr Kiener’s Excuse for Hedge Fund Fraud: Greedy Victims

November 18th, 2010

Helmut Kiener to his victims: "Its YOUR fault!"

Yesterday, we reported how alleged fraudster Helmut Kiener had spent the last year in lockup awaiting indictment for his crimes. He found out only this week that he will be facing over 100 counts of fraud and related charges.

Perhaps the year in the Big House affecting his thinking, because it has become quite convoluted. Herr Kiener plans to blame the clients of his K1 Group hedge fund for the €345 million scam he is accused of masterminding.

Kiener, who was arrested last October but only charged with forgery, fraud and tax evasion this week, will take the stand in his own defense “to expose how greedy the customers were,” his lawyer, Lutz Libbert, told the Financial Times.

How greedy were they? They apparently believed Kiener’s promises of annualized returns of 17%.  The investment community is shocked, SHOCKED at such greed.

Libbert did not comment on the more than 100 counts facing his client, but he did not sound sanguine about Kiener’s chances of beating the rap when he said, “the greed of the investors should help reduce any sentence the court may decide to hand down.”

Kiener has consistently denied any wrongdoing and has claimed K1′s losses were the result of bad investments. Prosecutors say he was running a Ponzi scheme and lied to his banks, Barclays Capital and BNP Paribas, costing them hundreds of millions of euros.

A total of eight people have been arrested in the K1 case, including a managing director of the hedge fund’s administrator, Treukapital Treuhandverwaltung. That man, identified only as Claus Z., was also charged this week.

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German Prosecutors Indict Ponzi Fraudster After A Year In Detention

November 17th, 2010

Suspect was detained in a German prison for over a year.

During WWII, the German Gestapo would think nothing of incarcerating a suspect for a year or longer before perhaps filing charges. Maybe that’s why German prosecutors were comfortable keeping alleged hedge fund fraudster Helmut Kiener on ice for a year as they got their ducks all lined up in a row.

Prosecutors raided Mr Kiener’s home office in Aschaffenburg, near Frankfurt, a year ago and put him under investigative custody. Finally, Kiener has been formally charged with defrauding investors, banks and brokers of €345 million.

Würzburg prosecutors pounded the K1 Group founder with 86 counts of forgery, 35 counts of aggravated fraud and one count of tax evasion. Kiener was arrested last October on suspicion of fraud, one of eight K1 employees or associates arrested in the alleged Ponzi scheme.

Lutz Libbertz, defence lawyer, said Mr Kiener would take the stand in court “to expose how greedy the customers were” who were lured by K1 brochures boasting of stellar returns of 17 per cent a year.

“The investors were allegedly promised substantial profits even though both funds had massive losses,” Dietrich Geuder, a spokesman for the prosecutor’s office, said. “Pretend profits could only be paid out using newly invested money.”

A second suspect in the case, identified as Claus Z., was also charged today. He was a managing director of Treukapital Treuhandverwaltung, K1′s administrator.

Z. was one of three previously unidentified people arrested last week as the investigation continues. Two of them, 35 and 80 years old, were managing directors of Treukapital. The other was the auditor of two K1 funds.

Treukapital’s David Zuendorf was among the five people arrested earlier. Two Kiener associates have been arrested in the U.S., while the fifth, Dieter Frerichs, former managing director of two K1 funds, committed suicide in July.

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