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Spanish ‘mini-Madoff’ sentenced to 13 years

A Spanish man has been sentenced to more than 13 years in jail for running a pyramid scheme that swindled €350 million from over 180,000 investors in Europe, the United States and Latin America.

Spanish 'mini-Madoff' sentenced to 13 years
Photo: artjazz/Depositphotos

Spain's National Court found German Cardona Soler, 46, dubbed the “mini-Madoff” in reference to jailed US conman Bernard L. Madoff, guilty of fraud, money laundering, document falsification and criminal association, according to a ruling published Friday.

Cordona's company, Finanzas Forex, offered returns of as much as 10-20 percent monthly for investments in currencies and instead used the money to buy real estate for himself and colleagues. He was arrested in 2011 in the Mediterranean city of Valencia along with two others.

The court said only five percent of the money was invested in currencies and its clients received “ridiculous quantities” in return for their investments.

The bulk of the money raised was used to buy buildings in Colombia, Spain, Panama and the United States for a total of $81 million.

The company also used the money to buy $107 million in gold, the court said in a ruling dated March 9th.

Finanzas Forex, which operated between 2007 and 2010, had over 186,000 clients. They were given false information about the gains their investments were making via a company web page.

Cardona's Colombian wife, Lina Maria Mantilla, 47, was sentenced to three years in jail for money laundering and criminal association.

The court ordered Cardona to pay a fine of €300 million while his wife was hit with a fine of €900,000.

Madoff is serving a 150-year sentence at a federal prison in North Carolina after he confessed to running a massive Ponzi scheme that fraudulently took in anywhere between $23 billion and $65 billion, depending on whether interest is included in the tally.

He never actually invested even a penny of the sums his clients entrusted to him, instead drawing on funds from new investors to remunerate the older ones.

But the house of cards collapsed in December 2008 when a growing number of investors, panicked by the financial crisis, attempted to cash out their investments.

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Danish central bank says speculators boosted profit

Denmark's central bank (Nationalbanken) on Wednesday said a big chunk of its profits last year came from battling speculators who bet it would abandon the krone's peg to the euro.

Danish central bank says speculators boosted profit
Lars Rohde presented the central bank's 2015 results on Wednesday. Photo: Nikolaj Linares/Scanpix
The central bank said it made a profit of 3.6 billion kroner last year ($534 million, €483 million), out of which 2.2 billion kroner came from “the pressure on the krone in early 2015”.
 
The Scandinavian country adopted a fixed exchange rate to the Deutsche Mark in 1982, and adopted a similar policy towards the euro since the creation of the single currency in 1999.
 
When Switzerland unpegged the Swiss franc from the euro on January 15th, 2015, prompting it to soar in value, speculators believed Denmark would follow suit with the krone.
 
But when their interest faded, the central bank bought back the currency at a slightly lower exchange rate than at which it was sold.
 
“To this should be added substantial interest income resulting from the reduction of deposit rates to -0.75 percent,” the central bank wrote in its annual report.
 
Sydbank analyst Jacob Graven said the result was a sign of “hysteria among investors.”
 
“There was no reason to believe that the central bank would lose the krone war, because (its) coffers are inexhaustible,” he wrote in a note to investors, referring to the central bank's capacity to create unlimited amounts of kroner to keep a lid on the currency's appreciation.
 
A quarter of the total profit, which included income from investments, was transferred to the government.
 
On a more sombre note, the central bank lowered its Danish growth forecast for this year by half a percentage point to 1.3 percent.
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