As reported in the Orlando Sentinel (http://www.orlandosentinel.com/business/nationworld/sns-ap-us-broker-fugitive,0,243149.story), a former Wall Street broker who was captured in Spain has plead guilty to federal securities fraud and bail jumping charges, admitting that he fled the country because he was frightened.

Julian Tzolov, 36, entered his plea just minutes before his trial was to begin in federal court in Brooklyn. U.S. District Judge Jack Weinstein asked Tzolov why he fled, touching off an international manhunt in May that ended when Spanish police caught the former broker for Credit Suisse’s private banking division last week.

The crimes to which Tzolov confessed, which also included visa fraud, carried a potential sentence of life in prison, but Assistant U.S. Attorney Greg Andres said there was a chance Tzolov may cooperate with the government and testify at the trial of Eric Butler, his former Credit Suisse colleague.

He said there was no cooperation agreement in time for Wednesday’s plea but discussions were continuing.

Tzolov was accused of duping foreign corporate customers into believing that $1 billion in U.S. securities being bought for their accounts was backed by federally guaranteed student loans.

The auction-rate securities actually were backed by subprime mortgages, collateralized debt obligations and other high-risk investments, authorities said. Because of their higher risk, they brought a higher yield and much larger commissions for the brokers.

When the market for the securities began crashing in August 2007, customers were left with more than $800 million in hard-to-trade securities.

Credit Suisse has said it notified authorities as soon as it became aware of the alleged fraud and has cooperated with the investigation. The defendants resigned in 2007.

Tzolov told Weinstein that he and Butler knew they were misleading clients from 2004 to 2007 and relying on emails that falsified the names of securities bought for clients. Tzolov also admitted that he forged letters of recommendation so he could become a U.S. permanent resident.

He said he cheated to obtain residency after he had been in the United States for 12 years.

If you purchased auction rate securities with Tzolov, Butler, or Credit Suisse,  and would like to speak to a securities attorney, please call The White Law at 312-238-9650 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Ration, Florida.

To learn more about The White Law Group, visit http://whitesecuritieslaw.com.