Ex-Hedge Fund Manager Charged with Fraud (AP)  (21-02-2008)

MIAMI (AP) -- According to a federal indictment unsealed Wednesday, the founder of Lancer Group hedge funds and four other people were charged with defrauding investors out of more than $200 million by manipulating market prices and overvaluing securities.

The charge is addressed to former fund manager Michael Lauer and the others with conspiracy and six counts of wire fraud. The indictment refers to a period starting in 1999 and ending in 2003, when the Lancer Group's assets were frozen by the SEC. It also says the fraud involved manipulation of closing market prices of shell companies based in Boca Raton so that they reached certain fiscal targets. Lauer also allegedly overvalued securities held by the Lancer Group, luring more investors into the funds, and falsified key documents.

The charges carry combined maximum penalties of 125 years in prison and fines of more than $1.7 million for each defendant.

The receiver appointed by the court in the SEC case to manage Lancer's assets and handle claims from investors reported in 2006 that about $633.6 million should be paid out.

Some Lancer assets were sold off, including an auction earlier this month for a Mercedes-Benz C11 race car that brought $2 million.

Source: AP