Wanted US broker detained in Spain

17th July 2009, Comments 0 comments

A former Wall Street broker who disappeared in May before he was scheduled to go to trial for alleged involvement in a USD 400 mln fraud has been arrested in Marbella.

Madrid – Spanish police have detained a former Wall Street broker accused of swindling corporate customers of over USD 400 million (EUR 284 million) in the United States, the interior ministry said Thursday.

Julian Tzolov, a Bulgarian national, was arrested on Wednesday in Marbella in Spain's Costa del Sol region on the Mediterranean Sea where he had been looking to rent or buy a luxury residence, it said in a statement.

The former broker for Credit Suisse's private banking division became one of the FBI's most wanted fugitives after he vanished in May from his Manhattan apartment just weeks before he was scheduled to go to trial.

At the time he was under house arrest at his Manhattan apartment where he was subject to electronic monitoring following his arrest in September 2008.

During his last court appearance on 22 April, his lawyer said Tzolov intended to plead guilty to avoid a trial for securities fraud.

US public prosecutors accuse Tzolov and his former Credit Suisse colleague Eric Butler of leading corporate customers into believing that they were buying securities that were backed by federally guaranteed student loans.

"In reality they were investing the funds in high-risk operations, including securities backed by subprime mortgages," the interior ministry statement said.

Since the investments were of a higher risk, the two brokers earned a larger commission.

The scheme, which they started operating in 2004, crumbled in 2007 when the market for securities began to collapse.

Butler is scheduled to go to trial in a federal court in New York next week.

AFP / Expatica

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