LONDON/ZURICH (Reuters) - Italian police have raided two properties and launched a fraud investigation into ex-fund manager Alberto Micalizzi, whose hedge fund collapsed during the credit crisis losing investors hundreds of millions of dollars.
Milan public prosecutor Alfredo Robledo told Reuters that finance police on Tuesday took away documents and computers from the home and office of Micalizzi, a researcher at Milan’s prestigious Bocconi University and an expert in options pricing.
A Reuters investigation into Micalizzi’s fund, DD Growth Premium, revealed in August that its main investment — $500 million of highly illiquid bonds — had been issued by a company in a trailer-park suburb of Phoenix, whose head was on the run from U.S. authorities.
Reuters also found that the bonds were backed by a global network of shell companies that included a Spanish-based charity, the International Charitable Christian Fund, whose Russian head Vladimir Kobzar had allegedly been convicted for fraud.
Micalizzi later denied that the commodity-backed bond purchased by his fund was invalid.
“We found some very significant materials,” said Robledo, who is leading the investigation along with fellow public prosecutor Tiziana Siciliano.
In a statement on Wednesday Micalizzi, 43, said that reports in the Italian press regarding Dynamic Decisions’ investments referred to last year’s Serious Fraud Office investigations.
“What’s more, further investigations carried out in the last three years by other authorities in the United Kingdom ... ended up excluding the hypothesis of fraud and clearing up doubts on how the company managed facts which today are reported by certain newspapers as new,” it said.
Micalizzi is considering possible legal action to safeguard his interests, the statement said.
The raids come after Britain’s Serious Fraud Office last year dropped a criminal investigation into Micalizzi’s London-based firm Dynamic Decisions Capital Management due to a lack of evidence.
Britain’s Financial Services Authority has, however, since reopened its investigation into “the provenance and value of the ... bonds.”
Micalizzi’s fund, which had attracted investors such as RMF, part of Man Group (EMG.L), and a subsidiary of the Ontario Teachers’ Pension Plan Board, and whose directors included Michael Nobel, great-grandnephew of the founder of the Nobel Prize, was put into liquidation in spring 2009.
Last year a judge in an Irish civil lawsuit between two investors in one of Micalizzi’s funds ruled the Italian had knowingly given a false picture to investors and set up “a fraudulent scheme” to persuade one to invest to pay off another.
A spokesman for Milan-based Bocconi University said it had asked Micalizzi on Tuesday to suspend himself following the raid and he had agreed.
“The finance police asked us (for) information and we collaborated,” the spokesman said.
Additional reporting by Stephen Jewkes in Milan; editing by Sinead Cruise, Alexander Smith and Bernard Orr