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UK fraud trial clears Maxwell brothers

By PAUL GOULD

LONDON, Jan. 19 -- A British jury on Friday cleared the two sons of late media tycoon Robert Maxwell of defrauding pension funds of assets worth 122 million pounds ($185 million) from Maxwell's publishing empire. The verdicts on Kevin and Ian Maxwell and one Maxwell financial adviser at London's Central Criminal Court, the Old Bailey, came after a marathon eight-month trial brought by the Serious Fraud Office. Kevin Maxwell shook hands with each member of the jury after the 'not guilty' verdicts were read out, while his brother Ian broke down in tears of relief. Speaking minutes later to the crowds of journalists and photographers outside the court, Ian Maxwell said he was confident his family's name was cleared. 'I would like to pay tribute to that same family and to the lawyers who have been a constant source of strength and pride -- as has my brother,' he said. 'I trusted him then and I trust him now.' The jury of five men and seven women spent 12 days reaching their verdict -- including a three-day break when a juror fell ill -- after a complex trial involving high-tech computer scanning of thousands of business documents. Kevin, 36, and Ian, 38, both former Maxwell directors, were charged along with Maxwell financial advisers Larry Trachtenberg and Robert Bunn. Bunn ceased to appear in the dock after suffering a heart attack in July. For the SFO, prosecuting lawyer Alan Suckling alleged they had conspired to defraud the pension funds of multi-million pound assets which they squandered on attempts to pay off the newspaper empire's massive debts.

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Kevin, who faced separate fraud charges together with his late father, insisted during the trial that he believed he was legitimately using shares he thought belonged to the private side of his father's companies. Maxwell's three-week testimony and his defense counsel Alun Jones clearly convinced the jury that assets had been transferred to those companies without Maxwell's knowledge or the knowledge of pension fund managers. The companies' losses and debts emerged in November 1991 when Robert Maxwell disappeared from his yacht, the Lady Ghislaine, off the Canary Islands and his drowned corpse was later found in the vicinity. It was then that the media empire became increasingly dependent on bank support and securing fresh equity. Part of the charges related to allegedly unauthorized dealing in shares of two Israeli companies, Scitex and Teva.

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