Aug 9, 2011 1:39 AM GMT+0800

http://www.bloomberg.com/news/2011-08-08/fund-manager-aleksander-efrosman-is-extradited-from-poland-u-s-says.html

Aleksander Efrosman, accused of cheating investors out of millions of dollars that he used for his own benefit, including gambling more than $3 million, was extradited from Poland, the U.S. said.

Efrosman, 49, who controlled foreign-currency hedge funds Century Maxim Fund Inc. and AJR Capital Inc., was indicted in 2006. He had fled the U.S. with millions of dollars in 2005, traveling to Mexico, Panama and then Poland, using the alias “Mikhail Grosman” and a fraudulent Russian passport, according to a statement today by U.S. Attorney Loretta Lynch in Brooklyn.

“This defendant allegedly created a web of lies to fleece unsuspecting investors,” Lynch said in the statement. “He will now be held to account for the charged crimes.”

Efrosman, a U.S. citizen, was living in Krakow and was extradited to the U.S. on Aug. 5, according to the statement. He faces mail-fraud, wire-fraud and money-laundering charges, and a maximum penalty of 20 years in prison. He was arrested in Poland on May 28.

He is accused of stealing money from clients who gave him $5 million in 2004 and 2005. He gambled more than $3 million at the Foxwoods Resort Casino in Mashantucket, Connecticut, prosecutors said.

His lawyer, Michael Schneider, couldn’t immediately be reached.

Made Promises

Efrosman, formerly of Staten Island, New York, was arraigned Aug. 6 in federal court in Brooklyn, and ordered detained, according to the statement. He is scheduled to appear before U.S. District Judge Nicholas G. Garaufis on Aug. 10.

Efrosman defrauded more than 100 investors by telling them he would invest their money in the stock market and foreign currency exchange market, according to prosecutors. He falsely said that he had a history of profitable trading and that he would use a “stop-loss” mechanism to ensure that no trade would lose more than 3 percent, according to the government.

Authorities in the U.S. and Europe caught Efrosman by monitoring his associates’ travel, according to an Aug. 5 letter from Assistant U.S. Attorney Daniel A. Spector to U.S. Magistrate Judge Andrew L. Carter, who ordered Efrosman detained.

Followed Associates

When the associates arrived in Austria, authorities from that country and Czech Republic followed the car that picked them up from the airport, according to the letter. They lost track of the car as it traveled eastward to Poland. Polish law enforcement officials used its license-plate number to locate and apprehend Efrosman in Krakow.

Efrosman fled the country while on supervised release after leaving prison in April 2003 for a conviction in a foreign exchange scheme, according to Spector’s letter. He pleaded guilty in that case after being extradited from France.

Efrosman perpetrated a third investment fraud while in Panama, where he was joined by his wife and children, according to Spector’s letter.

“Through his various money-laundering operations,” Spector wrote, “Efrosman is believed to have millions of dollars at his disposal.”

Efrosman also used the name Alex Besser and his first name is sometimes spelled Alexsander.

The case is U.S. v. Efrosman, 06-cr-95, U.S. District Court, Eastern District of New York (Brooklyn).