Former CEO among nine get jail sentences in Austrian bank trialJuly 4th, 2008 - 8:06 pm ICT by IANS
Vienna, July 4 (DPA) All nine defendants in Austria’s biggest banking scandal BAWAG fraud case were given prison terms Friday, with the bank’s former CEO getting the maximum sentence of nine and a half years in jail. Helmu Elsner, CEO of the Bank fur Arbeit und Wirtschaft (BAWAG) was found guilty of breach of trust and serious fraud, as he had ordered “aggressive and high-risk” investments carried out by US-based investor Wolfgang Floettl in the Caribbean.
Eight bank managers and Floettl were found responsible for having caused losses to the bank from off-shore investments between 1995 and 2000 and hidden them.
The US-based investor was sentenced to two years and a half in jail. He had received funds from Austria’s fourth largest bank with the full knowledge of not being able to pay them back, the court found.
The eight managers were given jail terms of between 10 months and five years, pending appeals by the defendants.
The scandal reverberated beyond the financial sector as the losses severely weakened one of its former owners, the Austrian Trade Union Federation.
In December 2006, the ailing BAWAG was sold off to the US-based hedge fund Cerberus.
Tags: 10 months, austrian bank, austrian trade, bank managers, bawag, breach of trust, financial sector, fraud case, half years, hedge fund, high risk, jail sentences, jail terms, maximum sentence, off shore, prison terms, risk investments, scandal, shore investments, trade union federation