Bahamas resident indicted on $182 million fraud charges

Tuesday, October 7, 2003

NASSAU, Bahamas: According to reports in the Nassau Guardian and the Wall Street Journal, Lyford Cay resident Viktor Kozeny was indicted last week in New York on charges of stealing $182 million from clients of Omega Advisors Inc., a New York-based hedge fund company. 

Kozeny, a 39-year-old Czech financier, has lived in The Bahamas since 1993. 

The Wall Street Journal reported Friday that, "investigators have dogged Mr Kozeny for years, and angry investors have been suing him in a tangle of civil proceedings in the United States and other countries. He has thus far managed to avoid arrest and has lately been living in luxurious Lyford Cay in The Bahamas." 

Mr Kozeny's assets have been frozen and the lawsuits against him - filed in courts in the United States, Britain, The Bahamas and the British Virgin Islands - have been pending the criminal investigation in New York. 

His lawyer Benjamin Brafman said Mr Kozeny "vigorously denies being involved in an effort to defraud any investor. The criminal charges filed against him are entirely without merit." 

Brafman said his client, who holds an Irish passport and lives in The Bahamas, "will decide whether to come back to New York to fight these charges or wage his legal battles from abroad." 

Mr Kozeny has been known as a flamboyant spender who owned two planes and a 165-foot yacht. At Lyford Cay he built a $14 million swimming pool the size of a small lake, Fortune magazine reported in 2000. 

Once said to be the Czech Republic's richest man, he has faced numerous fraud charges and lawsuits, and is expected to be tried in absentia by the Czechs for an investment scam dating back to the early 1990s. 

When the Czech government sold off shares in large state-owned companies to ordinary citizens, many of them decided to allow Kozeny's investment fund to manage their assets. He allegedly took the money and left the country, reappearing a few years later in Nassau with Irish citizenship.

Last July, the Czechs finally charged Kozeny with defrauding its citizens of $300 million. Kozeny has called the charges a withchunt. He is expected to be tried in absentia as a fugitive and faces up to eight years in prison. 

The Bahamas does not have an extradition treaty with the Czech Republic. And according to the Prague Post newspaper, Czech efforts to get Bahamian authorities to serve charges on Kozeny have failed because of a conflict between the nations' legal codes. 

Under Bahamian law, requests to serve charges must come from a court or other judicial entity, but Czech law authorizes only police to serve charges. 

"The process is illegal," Kozeny told the Prague Post recently. "I have cooperated with the Czech side through a court in the Bahamas, which ruled in my favour." 

Mr Kozeny said if the Czech Republic issues an international warrant for his arrest, Kozeny said, he would seek to invalidate it in a Czech court. 

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