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German Ponzi Man Jailed After Ripping Off Barclays

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http://www.independent.co.uk/news/business/news/german-ponzi-man-jailed-after-ripping-off-barclays-2319090.html

Germany's version of Bernard Madoff was sentenced to 10 years in prison yesterday for running a Ponzi scheme that defrauded Barclays and other investors out of €345m (£304m).

Helmut Kiener, the founder of the K1 fund, was found guilty of fraud, forgery and tax evasion after spending tens of millions of investors' money on luxury real estate, cars and planes.

The prosecution said Barclays lost €171m and BNP Paribas lost €52m with small investors incurring the rest.

In the run-up to the trial, Kiener said he would expose his clients' "greed" and that banks should have known what they were getting into. Yesterday he said: "My problem was that I didn't have the courage to end it all earlier. Now I have to pay for it."

...

K1 claimed returns of 849 per cent from 1996 to 2009. Like Madoff, whose $65bn (£40bn) Ponzi scheme was the world's biggest, Kiener paid out to established investors using new clients' funds while running huge losses to fund his own extravagant lifestyle.

I mean no stupid person would invest in this would they, returns of 849% I mean he must have been investing in property. :ph34r:

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"My problem was that I didn't have the courage to end it all earlier. Now I have to pay for it."

But there is no way to end a ponzi scheme without owning up to it because the most recent investors' money goes to the more established investors, so that the recent investors cannot get their money back.

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....plenty of stupid person(s)...and even more stupid Banks.... :rolleyes:

Stupid? Perhaps they realised it was likely a fraud but knew it would live until after bonus day, so they booked their profits. The behaviour would certainly be immoral but it's not stupid. Until we let banks fail they won't introduce safeguards to enforce stable business decisions. I don't like this but I'd rather have our country back on the straight and narrow than the current position, where the people get the moral victory +and+ the bill.

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Stupid? Perhaps they realised it was likely a fraud but knew it would live until after bonus day, so they booked their profits. The behaviour would certainly be immoral but it's not stupid. Until we let banks fail they won't introduce safeguards to enforce stable business decisions. I don't like this but I'd rather have our country back on the straight and narrow than the current position, where the people get the moral victory +and+ the bill.

...if that was the case they should be charged with fraud....I think you regard some of these Bankers as smart ...believe you me ...live in the real world...it would have been stupidity and a complete lack of control .... :rolleyes:

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I mean no stupid person would invest in this would they, returns of 849% I mean he must have been investing in property. :ph34r:

16.4%/anm (continuously compounded) doesn't sound quite as absurd as 849% over 13 years.

It is perfectly rational that some speculative investors might have placed money with this fund. The only decision they needed to make was this: is there:

( a ) A way for me to get my money out before it collapses?

( b ) If I'm investing someone else's money, can I reap performance fees without selling up... while maintaining the illusion that there's no way I could have known the fund was operated fraudulently?

If the investor thinks either a or b can be satisfied, it is in their interests to invest - even if it was clearly a criminal pozi.

Edited by A.steve

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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