FLORENCE Italy (Reuters) - Hedge fund manager Florian Homm, arrested in Italy last year on U.S. fraud charges but still to face trial, has been released because the statutory limit for keeping him in prison expired, his lawyer said on Wednesday.
Homm, a German citizen, was arrested at the Uffizi Gallery in Florence in March 2013 after five years as a fugitive for running what U.S. prosecutors called a fraud that caused investors to lose $200 million.
The founder and chief investment officer of Absolute Capital Management Holdings Ltd was accused of orchestrating a market manipulation scheme to artificially improve the performance of his funds.
One of his lawyers, Gabriele Zanobini, said that Italy’s top appeals court had ordered his release on Tuesday as he could no longer be kept in jail without a trial under Italian law.
“He was released yesterday,” Zanobini told Reuters.
The Italian government had agreed to extradite Homm to the United States so that he could be tried there.
But the extradition process was put on hold after Homm’s lawyers lodged an appeal with an Italian regional court and later with the European Court of Human Rights on the grounds their client would risk life imprisonment in the United States.
Zanobini said that the EU court had requested guarantees from the U.S. judiciary that, if convicted, Homm would not be jailed for life. In the meantime, however, the statutory limits for keeping him in an Italian prison had run out.
Absolute Capital, based in the Cayman Islands, managed nine hedge funds from 2004 to September 2007 and claimed to oversee $2.1 billion of assets as of the end of August 2007.
The criminal complaint filed in Los Angeles alleged that Homm directed the hedge funds to buy billions of shares of U.S.-based penny stocks and trade them among themselves to inflate their prices and the hedge funds’ asset values.
This in turn helped Absolute Capital attract new investors and collect higher fees, according to the prosecutors.
Homm, a cigar smoker nicknamed “Steamroller” who stands 6 feet, 7 inches (2.01 meters) tall, had become something of a celebrity in his native Germany, both as a symbol of greed and for saving the soccer team Borussia Dortmund from bankruptcy.
In his recent autobiography “The Rogue Financier: Adventures of an Estranged Capitalist,” Homm, a Harvard Business School graduate, told of having fled Majorca for Colombia in his private plane, with cash stuffed into his underwear.
He gave occasional interviews to promote the book while remaining in hiding.
Reporting by Silvia Ognibene; Editing by Mark Heinrich