German ‘Antichrist of finance’ arrested after five years on the run

Financier accused of short-selling to earn himself $53m

Florian Homm: absconded with $500,000 in his underwear. Photograph: Christof Koepsel/Bongarts/Getty Images

Florian Homm: absconded with $500,000 in his underwear. Photograph: Christof Koepsel/Bongarts/Getty Images

 

In the staid world of German business, Florian Homm was JR Ewing, Donald Trump and Gordon Gekko combined. A shaken rival who experienced Homm’s business methods first-hand dubbed him the “Antichrist of finance”.

Tall and tanned, the cigar-chomping financier delighted in presenting himself as the bad boy of the predatory hedge fund world.

Then on September 18th, 2007 – as his €200 million Absolute Capital Management Holdings, a portfolio of hedge funds, was in meltdown – he vanished and, with him, a reported €63 million.

The Friday before last, after five years on the run, he was apprehended discreetly at a gallery in Florence. Now in Italian custody, Mr Homm faces extradition to the US on securities fraud charges, the most serious of which carries a maximum prison sentence of 25 years. The trial is likely to expose the complex financial world Homm inhabited and his frequent clashes with the company’s Irish chief executive, Sean Ewing. In the years since he went on the run, Mr Homm has been working on his image – even publishing a memoir last year.

In it he described leaving his home in Mallorca in a private plane with $500,000 secreted in his underwear and, in his briefcase, German, Irish, Israeli and Liberian passports.

In five years on the run he adopted several identities, including that of Irishman Colin Trainor and Israeli Chaim Friedman. His aim: to stay below the radar as long as possible, and away from investigators.

“I was breaking all connections to my former existence,” he wrote. “My colleagues, clients, acquaintances, friends, bimbos, dogs, family and children – and annihilating my fast fortune in the process.”


Fast, vast fortune
Homm’s fast, vast fortune was once estimated at about half a billion dollars. A scion to Germany ’s Neckermann mail-order dynasty, the 6ft 8’ man was a juvenile basketball player and studied at Harvard. By his mid-20s he was a financier, managing the fortunes of several South American governments.

He owned a nightclub on the Mallorca seafront and a castle in Germany, and saved Borussia Dortmund football club from bankruptcy in 2004.

After leaving Mallorca in 2007 he went to Valencia and then on to the Colombian beach resort of Cartagena. He fled, he wrote later, after discovering his bodyguards were planning to kidnap him.

In the years since he vanished, he led the life of a millionaire itinerant, though reportedly spent most of his time in Venezuela.

The US Securities and Exchange Commission accuses him of manipulating share prices by trading thinly-traded shares between a brokerage and hedge fund, both of which he controlled. In a practice known as “portfolio pumping”, the trades pushed up the price of low-value stocks and inflated the value of Absolute Capital Management, prosecutors say, earning Mr Homm and associates about $53 million.

His arrest throws up more questions than it answers. How, for instance, did such a tall, distinctive man stay incognito for over five years? And why did he leave Germany where, as a citizen he would not be extradited?

Back in the spotlight
After years in seclusion, Mr Homm returned home to the spotlight last year, promoting his memoir on television and newspaper interviews.

Though he saw himself as being a “rogue operator” for most of his life, Mr Homm denied defrauding investors in his portfolio of hedge funds which, at one point, controlled about $2 billion. He vanished in 2007 not because he pocketed investor funds, he said, but to prevent some business associates having him killed.