Billionaire Helmut Kiener, 50, was accused of betrayal and breach of trust, his lawyer Lutz Libbertz told The Associated Press Thursday.

Kiener was arrested after investigators raided his home in Aschaffenberg on Wednesday after prosecutors in Wuerzburg said he was being investigated for fraud and breach of trust in relation to the British Virgin Islands-based K1 Global Sub Trust.

According to prosecutors, there "is a suspicion that the 50-year-old suspect did not comply with investment guidelines agreed with an English and a French bank among others and has used several millions in funds contrary to agreements."

A court ruled later Thursday that Kiener would remain in custody.

Germany's financial markets regulator, BaFin, would not comment on the case, but said that it had banned Kiener from being involved in the management of financial portfolios in 2001 and added that it had also banned finance commission deals by K1 Invest in 2004.

The allegedly defrauded companies, according to the arrest warrant, include Barclays Bank PLC and BNP Paribas SA.

BNP Paribas declined to comment.

Barclays Capital, the investment banking division of Barclays Bank, declined to comment on the arrest, saying only that it was cooperating with the investigation. Spokesman Daniel Hunter declined to go into any further detail.

Attempts to contact K1 at its offices in Tortola, British Virgin Islands, were not successful.

Calls to Kiener's home were not answered.

Kiener, on his personal Web site, touted his K1 Fund Allocation System. He said he developed it and put it into place in 1996 has had more than 80 percent positive months since its inception and net income in excess of 770 percent.

According to his Web site, Kiener studied social pedagogy and then psychology.

After starting his career in market research in 1987, he moved into advertising and then started the hedge fund.

Since 2001, he's also done freelance work as an investment advisor, which included advising a hedge fund from the Central Bank of the Netherlands. In May 2005 he started as a fund manager and advisor to X1 Allocation Fund GmbH.

___

Losch reported from Munich. Associated Press Writer Laura Stevens in Frankfurt contributed to this report.

___

On the Net:

http://www.helmut-kiener.com/

http://www.k1international.com/