9 sentenced to prison in Austrian bank fraud case

Nine people, including a prominent executive who fled to France in an attempt to elude justice, were convicted Friday of criminal charges in a major Austrian bank fraud case linked to the 2005 collapse of the U.S. commodities brokerage Refco. The losses came from a series of failed bets using risky derivative investments held in off-balance sheet vehicles. Though the bets go back as far as 1998, they surfaced only in 2006 during U.S. investigations into the bankruptcy of Refco, an affiliate of the Austrian bank Bawag. Claudia Bandion-Ortner, the Vienna federal court judge, found the defendants responsible for €1.4 billion, or $2.2 billion, in losses at Bawag. Helmut Elsner, former chief executive of Bawag, was found guilty of breach of trust, fraud and false accounting and was sentenced to nine and a half years in prison. The... [read full story]