Although I had not actually been aware of Florian Homm’s existence until the other day, I am delighted to report that he is no longer a fugitive from justice.
Now he’s just another hedgie gone bad, cooling his heels in an Italian jail while he awaits extradition to the U.S. to stand trial for defrauding investors.
He had managed to stay on the lam for nearly six years before being arrested while hiding in plain sight: strolling around the Uffizi Gallery in Florence, checking out B
otticelli’s Birth of Venus – or maybe just the babes.
Anyway, as you can tell by the picture to the right, he’s my kind of guy – even if he did con folks out of a lot of money and disappear in the middle of the night, which must have been a tad bit difficult, given that he’s six-foot-seven…
Anyway:
Homm is accused in a criminal complaint filed March 6 in federal court in Los Angeles of defrauding investors in hedge funds he controlled, causing $200 million in losses. He is charged with four counts of conspiracy, wire fraud and securities fraud. He faces as long as 75 years in prison if convicted on all counts.
The founder and former chief investment officer of Absolute Capital Management Holdings Ltd. is accused of “cross trading” billions of shares of penny stocks between the company’s funds to boost the value of the otherwise illiquid securities.
The trades, through a Los Angeles-based broker-dealer that Homm co-owned, generated fees for Homm and Absolute Capital and also inflated the price of Absolute Capital’s shares, U.S. prosecutors said. Homm “dumped” his shares and resigned from Absolute Capital on Sept. 18, 2007, “in the middle of the night,” according to the U.S. (Source: Bloomberg.)
When Homm decamped he went to Colombia, where he passed most of his away time before returning to his homeland of Germany last year. He came back not to face the music, but rather to promote his book - Rogue Financier: The Adventures of an Estranged Capitalist – which became a best seller in Germany last year. He wrote of his flight flight to Colombia in poignant, even heart breaking terms:
"As the jet climbed I was profoundly unsettled, my mind in a dense fog. I was breaking all connections to my former existence: colleagues, clients, acquaintances, friends, bimbos, dogs, family and children, and annihilating my fast fortune in the process."
Poor fellow. It’s one thing to have to sever your connections to colleagues, friends, family, dogs, and children. But bimbos?
Forget jail time, this guy has suffered enough.
And to show what an inner mensch he is, the proceeds of his best seller are going to a charity that benefits poor children in Liberia, the country that, coincidentally, provided him with the diplomatic passport that enabled him to travel without anyone patting him down to find the $500K he had stuffed in his pants when he fled.
But this plot is thicker than a Liberian diplomatic passport.
The initial leg of Homm’s passage to Colombia may have been a trip to Panama, using an Irish passport, and the name “Colin Trainor”. This is, of course, of special interest to me, given that me grandmother was a Trainor. She did not, to my knowledge, ever travel to Panama or Colombia. Or Ireland, for that matter.
The arrest in Italy is interesting, I must say, mostly because if he’d stayed put in Germany, Homm could not have been extradited to the U.S., since Germany allows extradition to EU countries only.
So perhaps Homm was looking to come in from the cold – he supposedly had a hefty bounty on his head, and also believes that at one point his bodyguard was lining up to kidnap him - and is hoping that he won’t be convicted. After all, he once hobnobbed with the likes of Boris Becker and Michael Douglas. Oh, wait, Michael Douglas couldn’t even keep his own son out of jail. Sorry, Florian. (It goes without saying that Homm claims he’s innocent of the charges against him.)
Meanwhile, Business Week is providing us with a tremendous public service by outlining some best practices for disappearing.
First rule: be prepared, by having money stashed away. “The best white-collar criminals think like mobsters” – think Whitey Bulger with all that cash behind the sheetrock – and, presumably, Homm had more money spread around than the $500K he stuffed in his Calvins. (Even in Colombia, that wouldn’t go all that far, especially if you were used to consorting with bimbos and Michael Douglas.)
A diplomatic passport, which is available at a price on the black market, lets you slip through airport customs pretty easily. And apparently Homm didn’t even have to pay for his. He was some sort of Liberian cultural attaché. (Yeah, right.)
You also have to pick your destination wisely.
As an entire generation of Nazis discovered, South America has long been a place to go.
“If you’re in Colombia and you give $10,000 to the chief of police, you’re now the mayor,” says J.T. Mullen, a 77-year-old private detective based in Manhattan.
Surprisingly, Britain, Israel, and Belgium are also good places for white-collar criminals. (So’s Brazil, but that’s hardly a surprise.) Canada, apparently, has carved out a niche among “Chinese plutocrats with criminal records.” (Who knew? Other than Chinese plutocrats with criminal records.)
It also helps to be accused of financial crime, rather than be a mass murderer like Osama bin Laden or a smaller-scale murder like Our Whitey.
Oh, and don’t bother to fake your death. That’s considered a dead giveaway of guilt, and no one will believe you unless you leave behind something as substantial as a limb as evidence.
Another no-no is contacting family and friends – so don’t call mom on Mother’s Day.
Assuming you can keep getting away with it is another mistake that folks on the lam make. You get careless. Which may be what happened with Florian Homm.
Or – ta-da – you get bored.
You get used to the cigars, the Michael Douglases, the nightlife, the bespoke suits, the bims… Then all of a sudden, you’re a nobody.
“If you can live quietly and not bother other people, he says, there’s a good chance you’ll remain undetected. “But that almost never happens,” laughs [Daniel] Richman [a former federal prosecutor who teaches law at Columbia University].
Living quietly, by the way, is how Whitey Bulger got away with it for so long.
As for Florian Homm, we’ll be seeing him in court.
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