British Financier Indicted in $46-Million Fraud Case

A federal grand jury indicted a British financier Wednesday for allegedly defrauding some 3,000 U.S. investors of more than $46 million, the Justice Department announced.

Atty. Gen. Edwin Meese III said American authorities would seek to extradite Alex William Herbage, the chief operating officer of Caprimex Group, to face trial in this country on the 25-count indictment returned in federal court in Orlando, Fla.

Herbage, 55, presently imprisoned in Winchester, England, was accused of falsely promising to invest the Americans’ money in gold bullion, commodities and European currencies.

The United States has an extradition treaty with Great Britain.

Herbage’s Caprimex Group was organized under the laws of the Cayman Islands for the ostensible purpose of running a number of investment funds, the department said.

It said Herbage was charged with 23 counts of mail fraud and two counts of interstate transportation of money obtained by fraud.

The indictment charged that in August, 1979, Herbage and his company “entered into a scheme to portray him as a successful international financial adviser, an expert on commodities and currencies and an investment analyst.”

Instead of investing funds entrusted to Caprimex, the indictment charged, Herbage spent the money on “a lavish life style” that included estates, villas and other homes in England, Scotland, Paris, the south of France and the Netherlands.

A British Broadcasting Corp. news report on Herbage, shown to reporters at the Justice Department, described the obese financier dressed as Henry VIII at a social function.

Herbage also was alleged to have chartered private jets and bought Rolls-Royce and Mercedes-Benz automobiles, valuable paintings, sculpture and other artworks.

Investors received “monthly account statements which falsely stated that their payments had been invested in the funds of the Caprimex Group and were earning substantial profits” as high as 35%, the indictment said.

Some investors, it said, received “lulling payments” from time to time, but, in the main, the money coming in was diverted by Herbage to his personal use.

The case was investigated by the U.S. Postal Service, the Royal Hampshire Constabulary, the U.S. attorney’s office in Orlando and the criminal fraud section of the Justice Department, officials said, adding that the probe is continuing.

If convicted, Herbage faces a maximum penalty of five years and a $1,000 fine on each of the 23 counts of mail fraud and 10 years in prison on the two counts of interstate transportation of property obtained by fraud.