Bloomberg: NY hedge fund sues Czech billionaire over alleged $1 bn fraud

Czech billionaire Radovan Vítek is being sued for allegedly defrauding a New York hedge fund and a Czech investment firm of more than $1 billion, Bloomberg news reports.

Kingstown Capital Management LP and Investhold Ltd. filed a lawsuit against the Czech real estate mogul in a Manhattan federal court on Wednesday, accusing him of engaging in a racketeering scheme spanning a decade.

They claim Vítek used a web of shell companies and “straw owners” to gain control of a Luxembourg-based real estate development company in which Kingstown Capital held a substantial interest.

He then sold the most valuable assets at “distressed prices” to entities he secretly controlled, the lawsuit alleges.

Vitek is worth about $2.3 billion, according to the Bloomberg Billionaires Index. His company CPI Property Group SA is also named in the suit, filed under the RICO racketeering act, as are J&T Banka, Milada Malá (Vítek’s mother), former Orco CEO Jean-Francois Ott.

Kingstown is owned by two Czech entrepreneurs: Marek Čmejla and Swiss citizen Jiří Diviš.

Author: Brian Kenety