Florian Wilhelm Jurgen Homm, the German hedge-fund manager who has been a fugitive for more than five years, was arrested today at the Uffizi Gallery in Florence on U.S. fraud charges.
Homm, 53, allegedly caused at least $200 million in losses to investors in hedge funds operated by Absolute Capital Management Holdings Ltd., according to a statement by the U.S. attorney’s office in Los Angeles. Homm was arrested by Italian authorities following a U.S. request, according to the statement.
Federal prosecutors in Los Angeles filed a criminal complaint March 6, charging Homm with conspiracy and fraud. The founder and former chief investment officer of Absolute Capital is accused of “cross trading” hundreds of millions of shares of penny stocks between the company’s funds to boost the value of the otherwise illiquid stocks.
The trades, through a Los Angeles-based broker-dealer that Homm co-owned, generated fees for Homm and Absolute Capital and also inflated the price of Absolute Capital on the London Stock Exchange, Alternative Investment Market, according to the statement. Homm “dumped” his shares and resigned from Absolute Capital on Sept. 18, 2007, “in the middle of the night,” according to the statement.