Maxwell’s 2 Sons Arrested on Fraud Charges : Scandal: Ian Maxwell, Kevin Maxwell and their American financial adviser were formally charged in connection with millions in missing pension funds.
Two sons of the discredited financier Robert Maxwell were arrested Thursday in connection with the disappearance of millions of dollars in pension funds from the late publisher’s financial empire.
Ian Maxwell, 36, and Kevin Maxwell, 33--along with their American financial adviser, Larry Trachtenberg, 38--were formally charged with conspiracy to defraud others of millions of dollars. Kevin Maxwell and Trachtenberg were also charged with theft.
The men spent several hours in a London police station before they were released after posting a combined bail close to $2 million. Bail was set at $925,000 for Kevin Maxwell, according to the Associated Press.
The indictments were the latest development in the evolving Maxwell scandal, which has unraveled since the autocratic head of the family disappeared off his yacht at sea in November.
After his body was found floating in the Atlantic off the Canary Islands, a Spanish coroner ruled the elder Maxwell most likely died of natural causes after falling overboard.
Skeptics questioned whether he was murdered or killed himself as his business holdings unraveled because of crushing debts.
The day after their father’s death, Kevin was named chairman of Maxwell Communication Corp., and Ian took over as chairman of Mirror Group Newspapers. The two men, both Oxford University graduates, resigned from their positions Dec. 3.
Besides making the surprise arrests of the Maxwell sons and Trachtenberg at their expensive homes in posh parts of London, police also seized many documents in the suspects’ houses.
The Maxwell sons, who were directors in their father’s public and private companies, have remained silent about him and their financial activities. They have refused to testify before a committee of the House of Commons, pleading possible self-incrimination.
But police fraud squad officers said that the sons, as directors of his companies, will be prosecuted because they illegally moved money out of the public corporations’ pension funds. British financial authorities assert that Robert Maxwell, with the sons’ approval, moved millions of dollars from the pension funds of his publicly owned companies into other accounts to buy stock to prop up the share prices of his businesses.
Independent Television News showed police knocking at Kevin Maxwell’s $1.3-million brick townhouse in London’s fashionable Chelsea district at 6:35 a.m.
“We don’t get up for an hour!” Pandora Maxwell, his wife, shouted from a second-floor window. She threatened to call the police.
“We are the police,” two plainclothes officers responded.
Shortly afterward, a pale-looking Kevin Maxwell was led away.
Among other things, Kevin Maxwell and Trachtenberg were charged with defrauding Swiss Bank Corp. of $101 million by selling stock they did not own and stealing $13 million worth of stock belonging to Mirror Group Pension Trustees Ltd., one of the Maxwell company pension funds.
Ian Maxwell was charged with defrauding Swiss Volks Bank of $35.5 million by misrepresenting ownership of stock in Berlitz International after Robert Maxwell died, according to fraud office documents. This charge was also brought against Kevin Maxwell and Trachtenberg.
Maxwell’s media empire grew overextended, business sources say, when he bought into the American market, taking over MacMillian publishers and the New York Daily News and accumulating massive debt in a declining market.