UPDATE 1-Lancer Group hedge fund ex-manager indicted by US

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WASHINGTON, Feb 19 (Reuters) - Former Lancer Group hedge fund manager Michael Lauer and four others who defrauded hedge fund investors of more than $200 million have been indicted on conspiracy and wire fraud charges, the U.S. Justice Department said on Tuesday.

Lauer was named in an indictment unsealed in Miami, along with two co-owners of management companies that directed the hedge funds and two men who had had financial interests in Boca Raton, Florida-based "shell" companies in which the hedge funds invested, the Justice department said.

According to the indictment, from October 1999 to July 2003, Lauer and his co-defendants manipulated the closing market price of thinly traded shell company securities to falsely inflate the value of Lancer Group hedge funds.

The indictment alleges Lauer also created fake portfolios of the securities supposedly held by Lancer Group and obtained falsely inflated appraisals of the shell companies to cover up and perpetuate the scheme.

If convicted, all five men could face a maximum sentence of 20 years for wire fraud, five years for conspiracy and up to $500,000 in fines. (Writing by JoAnne Allen; Editing by Gary Hill and Braden Reddall)