Prosecutors say that former Credit Suisse broker Julian Tzolov has become a fugitive. Tzolov was set to go to trial later this month on fraud charges. He had been released on bail and subject to home confinement. But now he has vanished.
The Dow Jones newswire reports that the U.S. Attorney’s office in Brooklyn sent a letter to the court officially labelling Tzolov, a native of Bulgaria, a fugitive. It seems he may have been missing for almost a month.
Tzolov and another former Credit Suisse broker, Eric Butler, have been charged with conspiracy, securities fraud and multiple counts of wire fraud. Prosecutors alleged that the two brokers bought high-risk mortgage backed auction rate securities for clients who were told they were buying lower-risk securities backed by student loans. The mortgages by ARS apparently brought in higher commissions.
The scheme was undone by the credit crisis. When auctions for the auction-rate securities began to fail, the brokers found they couldn’t liquidate the investments they had allegedly made with client money. They were suspended once their scheme came to light, and resigned in September of 2007.
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