LONDON -- Two sons of the late, discredited financier Robert Maxwell were charged formally yesterday with conspiracy to defraud others of millions of dollars.
Ian Maxwell, 36, and Kevin Maxwell, 33, along with their American financial adviser, Larry Trachtenberg, spent several hours in a London police station after their arrest early yesterday. Kevin Maxwell and Mr. Trachtenberg also were charged with theft. They were released after posting a combined bail of more than $1 million.
The indictments were the latest development in the evolving Maxwell scandal, which has unraveled since the autocratic head of the family disappeared off his yacht at sea in November.
Besides making the surprise arrests of the Maxwell sons and Mr. Trachtenberg at their expensive homes in posh parts of London, police also seized many documents in the suspects' houses.
The Maxwell sons, who were directors in their father's public and private companies, have remained silent about him and their financial activities. They have refused to testify before a committee of the House of Commons, pleading possible self-incrimination.
But officers of the police fraud squad said the sons, as directors of his companies, will be prosecuted for allegedly moving money illegally out of the corporations' pension funds.
British financial authorities say that Robert Maxwell, with the sons' approval, moved millions of dollars from the pension funds of his publicly owned companies into other accounts to buy stock to prop up the share prices of his businesses.
Independent Television News showed police knocking at Kevin Maxwell's $1.3 million brick town house in London's fashionable Chelsea district at 6:35 a.m.
"We don't get up for an hour!" Pandora Maxwell, his wife, shouted from a second-floor window. She threatened to call the police.
"We are the police," two plainclothes officers responded.
Shortly afterward, a pale-looking Kevin Maxwell was led away.
Among other things, Kevin Maxwell and Mr. Trachtenberg were charged with defrauding Swiss Bank Corp. of $101 million by selling stock they did not own and stealing $13 million worth of stock belonging to Mirror Group Pension Trustees Ltd.
Ian Maxwell was charged with defrauding Swiss Volks Bank of $35.5 million by misrepresenting ownership of stock in Berlitz International after Robert Maxwell died, according to fraud-office documents. That charge also was brought against Kevin Maxwell and Mr. Trachtenberg.
Robert Maxwell's media empire grew overextended, business sources say, when he bought into the U.S. market, taking over MacMillan publishers and the New York Daily News and accumulating massive debt in a declining market.
When he died mysteriously at sea and was buried in Jerusalem, he was eulogized as a tycoon. But authorities said later that he had moved millions of dollars out of pension funds he controlled to sustain the stock prices of his companies.
Authorities' allegations that his sons may have played a role in a possible pension-fund swindle has caused outrage in Britain.
Reports that the Maxwell sons have dined in expensive restaurants and have attempted to re-establish themselves as financiers -- while Maxwell company pensioners fret about their futures -- have become a potent political issue in Britain's popular press.