German ponzi suspect commits suicide in Spain: police

6th July 2010, Comments 0 comments

Dieter Frerichs, the head of a German fund for hedge funds, has committed suicide to avoid arrest and deportation to his homeland where he is wanted for fraud, police said Tuesday.

The 72-year-old managing director of the K1 group shot himself in his villa in the island of Majorca on Saturday.

"He put a bullet through his head when he saw the police coming to arrest him," said a police officer. "He fell into the water."

Frerichs house was on a rocky ledge overlooking the sea.

The alleged K1 ponzi scheme is thought to have run into hundreds of millions of euros and has been likened to the Madoff scandal in the United States.

The hedge fund group was registered in the British Virgin Islands. It had attracted the attention of Germany's financial sector watchdog BaFin since June 2004.

German lawyer Klaus Nieding told AFP in October he feared a "new Madoff case," saying: "Estimations of damages run from 500 million to one billion euros (740 million to 1.48 billion dollars), of which half involves institutional investors."

The French bank BNP Paribas is among the investors concerned and an investigation has also begun in the United States.

© 2010 AFP

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