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Austrian charged with defrauding 13,000
Wed, 12 Jan 2011 04:43:44 GMT
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Austrian businessman Wolfgang Auer-Welsbach
An Austrian businessman is standing trial on charges of defrauding nearly 13,000 private investors of some 400 million euro in a Ponzi-style scheme.

Wolfgang Auer-Welsbach, who is charged with embezzlement, fraud and tax evasion in connection with the bankruptcy of the financial group AvW (AvW Gruppe), allegedly directed a group of financial companies in order to pocket 400 million euro ( $518 million) from 13,000 investors , Austrian Press Agency reported Tuesday.

According to the report, a prosecutor at a court in Klagenfurt in southern Austria stated that as head of the AvW group, Auer-Welsbach formed the financial companies with "the single aim of shifting assets into his own pocket."

AvW Gruppe allegedly had promise investors annual returns of up to 18 percent as part of its tempting advertisement that caught attention of many investors, including the Austrian Foreign Minister Michael Spindelegger.

The group was declared insolvent last May, long after the offer for returns went down the drain in 2008, when the global financial crisis hit several countries in Europe.

Auer-Welsbach, who has been held in police custody since last April, has pleaded not guilty to the charges of fraud and embezzlement.

If found guilty, Auer-Welsbach would face a maximum of 10 years in prison.

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