A German hedge fund manager, who was on the run for more than five years, has been arrested in Italy and is to face federal fraud charges in the U.S.

The U.S. attorney’s office reports that fund manager, Florian Wilhelm Jürgen Homm, 53, was arrested at the Uffizi Gallery in Florence, at the request of U.S. authorities. Federal prosecutors in Los Angeles obtained an arrest warrant on March 6, after filing a criminal complaint that charges Homm with: securities fraud, wire fraud, and two counts of conspiracy to commit fraud. The allegations have not been proven, and he is presumed innocent.

It charges that Homm, who was founder and chief investment officer of Absolute Capital Management Holdings Limited, a Cayman Islands-based investment advisor that managed nine hedge funds from 2004 until September 2007, directed the hedge funds to buy billions of shares of thinly traded, U.S. penny stocks through an LA-based broker dealer he co-owned, Hunter World Markets Inc. (HWM). And that the funds then traded the stocks among themselves to boost their prices, which seemingly enhanced the funds’ performance, generating additional fees for Homm and the firm, and boosted Absolute Capital’s stock price on the London Stock Exchange’s Alternative Investment Market.

The allegedly fraudulent conduct caused at least US$200 million in losses to investors in the hedge funds, it says. And, it also alleges that the scheme netted Homm and his co-schemers more than US$53 million.

The case against Homm is the product of an ongoing investigation by the Federal Bureau of Investigation (FBI), assisted by the US Securities and Exchange Commission (SEC), it says. Back in 2011, the SEC also brought charges against Homm, along with co-accused Todd Ficeto of Malibu, Ca., and a trader that lives in Canada, Colin Heatherington. The SEC’s complaint charges Ficeto, Homm, Heatherington, and HWM with violating, or aiding and abetting violations of various securities laws.

Those allegations haven’t been proven either. At the time, the SEC acknowledged the assistance of the BC Securities Commission (BCSC) and the Financial Industry Regulatory Authority (FINRA) with its case. It also instituted separate, but related, administrative proceedings against an HWM trader and its former chief compliance officer, who agreed to settle their cases without admitting or denying the SEC’s findings.