Hunt for fugitive tycoon ends in Miami

Search for man behind the biggest property collapse in German history ends in US but the world still offers hiding places for some

F

After more than a year on the run, they got him. His silvery toupee - once a permanent fixture - was missing, but he had grown a moustache. When the police arrested him on Thursday, the man in checked Bermudas went quietly. The search for Jurgen Schneider, responsible for the biggest property collapse in German history, was over.

Mr Schneider was tracked down in lorida, where he and his wife, Claudia, have been living for months. He was arrested outside a bank in Miami. His wife was arrested in an apartment in Hallandale, 15 miles north of the city. A federal magistrate yesterday refused to release Mr Schneider and his wife on bond pending a hearing to extradite them to face massive fraud charges in Germany.

The couple, handcuffed and both dressed in dark blue prison trousers and light blue shirts, told the judge they would not make any statements until their respective lawyers arrived from Geneva. "I do understand the allegations, however I do not accept them," Mr Schneider said during a brief appearence before the federal magistrate, who asked him if he understood the charges against him.

Mr Schneider was ordered to appear again before a federal judge on Wednesday.

Speculation about Mr Schneider's whereabouts had taken in just about every possibility in the past year. One article in the Bild newspaper, headlined "Three hot leads", listed Dubai, Paraguay and Liechtenstein. In another, Bild asked: "Namibia? In the bush? Tehran? Lanzarote? Guatemala? Switzerland? Or with the Eskimos?"

There were reported sightings of Mr Schneider in lorida, where he had a house. But he vanished before the sightings could be confirmed.

The reason for the fuss is pounds 2bn of debts that Mr Schneider left behind. Until his disappearance, he was a hero. Politicians in rankfurt and Leipzig,where he was most active, praised the powerful property developer with the elegant toupee. In Leipzig, he was feted as the man who put life back into the city centre, with his expensive revamps of historic buildings.

Leipzig went into a panic after he disappeared. Work stopped on the prestigious building sites, including the urstenhof Hotel. Small builders feared the worst, with tens of millions of marks of outstanding debts.

If the little people were worst hurt by the debacle, the big banks' prestige was damaged. Mr Schneider's largest creditor had been Deutsche Bank, whose controls were less than thorough. Because he was so rich, it was assumed no questions should be asked. Half a billion pounds was lent by Deutsche Bank alone.

To support the view that bankers live in a world of their own, the chief executive of Deutsche Bank, Hillmar Kopper, described the pounds 20m owing to small builders and craftsmen, as "peanuts". The contemptuous one-liner gained instant notoriety, and will probably remain Mr Kopper's most famous line.

The collapse of the Schneider empire - with a castle-like headquarters outside rankfurt and investments in 14 cities across Germany - was triggered because of over-ambitious investments. Mr Schneider's expensive renovations of the Madler Passage in Leipzig and Auerbach's Cellar, scene of a famous episode in Goethe's aust - demanded rents few could afford, especially in the east. Mr Schneider had to let the properties at a loss, or keep them empty.

Some had early doubts about his projects. But the collapse came like a bolt from the blue. He sent a fax on Easter Monday last year, saying he would not be returning from holiday in Italy, and thank you for the memories.

His company put out a deadpan press release, which began: "To our surprise and dismay, Dr Jurgen Schneider has informed us that he has become ill over Easter, and that on the advice of his doctors, he must withdraw from active involvement in the enterprise. His current whereabouts are not known."

Mr Schneider, 60, reportedly took with him millions of marks in cash in suitcases. He popped back into public view last week with a message which Bild's headline described as "cheeky as snot".

Through his Swiss lawyer, he sent German television a 10-page letter and a tape-recording. On the tape, Mr Schneider referred to reports he might be dead. "We can assure you that we are entirely free and in good health." He said he and Claudia had one wish. "To be able to return to Germany, without a warrant for our arrest, to be with our family, our children and our friends. Goodbye!''

He claimed he was not to blame for any of the disasters, adding: "The Deutsche Bank knew everything. It triggered the catastrophe."

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