An ex-Beverly Hills stockbroker surrendered to federal authorities today to face charges alleging a scheme to defraud investors in hedge funds, causing $200 million in losses.
Todd Ficeto, 49, formerly of Malibu, was indicted by a federal grand jury in Los Angeles late Wednesday on charges alleging conspiracy and multiple counts of securities fraud, according to the U.S. Attorney’s Office.
The indictment charges that between September 2004 and September 2007 Ficeto conspired with German fugitive hedge fund manager Florian Homm and others to make illegal trades to boost the value of otherwise illiquid securities.
The trades, through a Beverly Hills broker-dealer that Ficeto and Homm co-owned, generated fees for Homm and his Absolute Capital Management Holdings company and inflated the price of the firm’s shares, prosecutors said.
The indictment further alleges that Ficeto engaged in unlawful monetary transactions by sending nearly $10 million of illicit proceeds to an account in the Cook Islands, and then lied to the Securities and Exchange Commission about the account.
Ficeto additionally is charged with fraud in connection with a hedge fund called the Hunter Fund, in which Homm’s firm invested and also was used to conceal investments in penny stocks and to manipulate the stock market, prosecutors said.
The indictment alleges that as the scheme unraveled, Homm dumped tens of millions of dollars of his own shares in Absolute Capital and resigned from the firm in the middle of the night in September 2007.
In March 2013, Homm was arrested in Italy at the Uffizi Gallery in Florence pursuant to a provisional arrest warrant sought by federal prosecutors in Los Angeles after they filed a criminal complaint containing charges related to the alleged fraud scheme.
The United States sought Homm’s extradition and he was ordered extradited by the Italian Ministry of Justice, but Homm ultimately was released and is believed to have fled to Germany, where he remains a fugitive.
The indictment also contains a forfeiture allegation that would cause the defendants if convicted of any of the securities or money laundering counts in the indictment, to forfeit to the United States “any and all property, real and personal, which constitutes or is derived from proceeds traceable to” any of those crimes.
