Legal News

Former Credit Suisse Broker Allegedly On The Lam

By Amir Efrati

It's been awhile since we have had a good fugitive situation on our hands (we know you’re still out there, Kobi!), but it appears a former Credit Suisse broker has gone missing.

Federal authorities say they no longer know the whereabouts of Julian Tzolov, who was indicted for allegedly lying to clients about placing more than $1 billion of their money in mortgage-related securities.

The 36-year-old Tzolov, a native of Bulgaria, was expected to plead guilty later this month, his lawyer said in April. But prosecutors in Brooklyn on Friday told a federal judge that Tzolov had been missing since May 9, when he left his New York home without permission. An arrest warrant for Tzolov was issued May 11 but remained under seal until Thursday, according to a letter the government sent the court Friday.

Tzolov's lawyer couldn't immediately be reached for comment.

Tzolov’s whereabouts have been an issue before. In September, before he was charged, authorities believed he had fled the country. But after the charges were brought, he returned to New York from Bulgaria. His bail required him to remain house-bound and monitored electronically. It's unclear how he evaded detection in allegedly fleeing. The government said it had “undertaken an extensive effort” to find him.

Another former Credit Suisse broker, Eric Butler, who is a friend of Tzolov, was also charged in the case and has pleaded not guilty. His lawyer couldn't immediately be reached for comment. Jury selection was scheduled for June 22 in the criminal case against Tzolov and Butler. They have been charged with conspiracy, securities fraud and multiple counts of wire fraud.

Tzolov's plea would have marked the first criminal conviction stemming from the so-called auction-rate securities mess, in which hundreds of thousands of investors were left holding billions of dollars worth of securities they couldn’t easily sell.

Tzolov's lawyer had said his client would resolve the case after prosecutors told the court earlier this year they had evidence Tzolov lied in his application to become a U.S. resident. On Friday prosecutors asked a federal judge for a 60-day adjournment of the trial.

Tzolov and Butler resigned from Credit Suisse last September amid accusations of fraud by their clients and joined Morgan Stanley, which later fired them after learning of the criminal investigation.

Full post as published by Law Blog - WSJ.com on June 05, 2009 (boomark / email).