Austrian Real Estate Mogul Rene Benko Headed to Jail

Rene Benko will have plenty of time in a cell to think about the demise of his $27 billion real estate empire.

An Austrian court sentenced the real estate mogul to two years in jail for insolvency fraud on Wednesday, Bloomberg reported. He was found guilty of gifting his mother nearly $350,000 in 2023, though he was acquitted of a charge involving an even larger payment.

Prosecutors claimed Benko deliberately moved money to a company he had indirect control of and then transferred cash to his mother ahead of a personal insolvency filing to shield money from creditors.

Benko’s lawyer disputed the charges and plans on reviewing the verdict before deciding next steps.

There are more than a dozen criminal allegations against Benko, but these were the first to make it to court. Prosecutors are also looking into allegations of fraud, embezzlement and more insolvency fraud, putting Benko in the crosshairs of German and Italian authorities.

Benko’s holding company filed for insolvency near the end of 2023, sending a property portfolio once valued as high as $30 billion into chaos. Signa’s major holdings included stakes in large European department stores and the Chrysler Building in Manhattan, which Benko bought in partnership with Aby Rosen’s RFR Holding in 2019.

Those with large exposure to Signa include Swiss bank Julius Baer, which had roughly $690 million lent to Signa at the time of the insolvency filing, and Austrian bank Raiffeisen Bank International, exposed to the tune of $830 million.

Dozens of creditors submitted claims for more than $1.2 billion in the immediate weeks after the insolvency. Insolvency administrators and former Signa board members are expected to hold meetings regarding damages this month.

Benko has been in legal trouble before: in 2012, he received a tax fraud conviction after allegedly trying to bribe Italian officials. Two years ago, Benko was acquitted on bribery charges in Austria.

— Holden Walter-Warner