The billions lost by American investors with hedge funds from an Allianz subsidiary become a criminal case.
The chief investor for several "Structured Alpha" funds, Greg Tournant, and two fund managers have manipulated the development of the funds for years and understated the risks associated with the investments, the Justice Department said on Tuesday in New York.
Tournant, who Allianz fired at the end of 2021, is accused of conspiracy, securities and investment fraud and obstruction of justice.
A ministry spokesman said he turned himself in to the authorities in Denver.
Large investors such as pension funds had lost a total of 7 billion dollars with the funds when the capital markets collapsed in March 2020 in the Corona crisis.
Several funds were wound up.
The American branch of the Munich insurance group's asset manager Allianz Global Investors, AGI US, has pleaded guilty to not keeping a close eye on the fund managers, the ministry said.
After a settlement with the ministry, Allianz is willing to pay a $2.33 billion penalty and $3.24 billion to compensate investors for their lost stakes.
But she would be waived $1.89 billion from the fine because she had already paid more compensation to investors, including the Arkansas Teachers' Pension Fund.
A further 463 million would be confiscated in favor of the treasury.
In a separate settlement, Allianz will pay SEC $675 million.
Allianz, which has now declared itself guilty of securities fraud, has already set aside 5.6 billion euros for the investment scandal.
As the group announced, AGI US will now transfer assets under management of 120 billion dollars "to a new US partner", Voya Financial.
A corresponding declaration of intent has been signed.
Previously it had been assumed that the losses were bad speculation because the fund managers had gotten cold feet in the ups and downs of the markets.
But according to their investigations, the US authorities accuse the fund managers of having deliberately misled investors since at least 2014.
More than two dozen investors had sued AGI.
Allianz boss Oliver Bäte admitted the debacle in August 2020 and pushed for a quick settlement after the insurer had always rejected the allegations until then.Keywords: