Economy

Liechtenstein Banker Murder, The Silicon Valley Connection

After striking it big in the U.S., Jurgen Hermann battled financial powers back in Liechtenstein. A reporter recalls the unraveling of a man now accused of murdering a top banker.

Jurgen Hermann, Liechtenstein's most wanted man.
Jurgen Hermann, Liechtenstein's most wanted man.
Uwe Ritzer

VADUZ — They think the accused murderer is dead, but can't be sure of much at this point.

"We believe he may have committed suicide," says Jules Hoch, Liechtenstein’s police chief. "But as long as we haven’t found the body we have to assume he may still be alive."

Authorities continue to search in and around Vaduz, the capital of the tiny principality while helicopters equipped with infrared cameras circle overhead.

Security was also tightened in the principality, which counts 35,000 inhabitants. The parliament building is being watched more closely than usual, and there is talk of cancelling hearings. The financial institutions as well are under close surveillance.

The man that everybody wants to find, dead or alive, is named Jürgen Hermann.

On Monday he is alleged to have shot dead the well-known fund manager Jürgen Frick, 48, head of the eponymous Liechtenstein private bank. The brother of Mario Frick, a former Head of Government in Liechtenstein, Jürgen Frick is survived by his wife and three children.

Hermann is said to have killed him in the bank’s underground garage. Surveillance camera images reportedly show three shots being fired.

That evening, along the Rhine River, the police found a jacket, keys, a driver’s license, a passport, a letter and a confession from Hermann — but no trace of the man himself.

This reporter can offer a suddenly relevant flashback to a sunny day in 2008, sitting with Jürgen Hermann in an outdoor café. He was sounding off on the financial industry of Liechtenstein, which he believed was run by "criminals."

He'd show them, Hermann muttered.

He spoke about his life. How in his 18 years in the United States he'd made a fortune, in part due to his invention of a dive computer. He’d owned beach homes in San Francisco and Hawaii, he said.

"In those days my family and I would easily spend a million a year." When we spoke, however, he was living off some remaining capital, because when he came back to Liechtenstein “they” had led him to ruin — “they” being the Frick bank, financial authorities, the government, the princely family, everybody in Liechtenstein in fact. And they were going to pay a heavy price for that, he declared.

The drama began when Hermann, an electrical engineer, created two funds — Silicon Valley Equity and Global Equity — that invested in technology companies in Silicon Valley. On that sunny day in the café six years ago, he spoke with a mix of enthusiasm and bitterness about how his funds had "garnered attention worldwide" and placed top in all the rankings.

Absurd and unfounded

Then, "for no reason," financial authorities roped them in, apparently because their advertising had been too strident. When that news got out in 2004, many investors withdrew their money. The funds ended up in liquidation. Hermann claimed to have lost 30 million Swiss francs ($34 million).

He saw himself as a victim of a plot by competitors and people who envied him — something that Jürgen Frick called "ludicrous, absurd, and unfounded." Hermann filed a multimillion suit and started circulating information about the case on the Internet and to the international media.

The impression Jürgen Hermann made as he recounted his version of events was of a volatile, cocky man, highly intelligent and angry beyond all measure. Over the years, that anger became hatred. His correspondence became increasingly aggressive and often riddled with cheap shots at numerous targets. He went to court and predicted triumphant victory shortly before the verdict — these judges knew what they were doing, he said. When he lost, he described them as a "monkey court."

Justice authorities were warned to keep an eye on Hermann, whose behavior was becoming ever more erratic. At some point he started calling himself Robin Hood. It was him against the financial mafia. His legal fights morphed from campaigns into crusades. Behind the scenes he was on a constant quest for contacts in the princely house, in government and other Liechtenstein institutions, to see if some out-of-court settlement could be reached. But nothing panned out. The situation worsened.

When he got a letter from somebody criticizing his methods as excessive, Hermann angrily faxed the letter back to the sender with the words “where there is injustice there is soon war” written on it. By this time, even people who sympathized with him were taking their distance.

"He was his own undoing," says someone who knew him well.

And now the spectacular end — if in fact it is the end. The place where Hermann’s belongings were found is along a dangerous stretch of the Rhine with life-threatening whirlpools and currents. A place where a body is unlikely to be found. But until one is, locals aren’t buying the suicide theory.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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