With that rude awakening, the Maxwell scandal became a family affair. After Maxwell’s mysterious death in the waters off Tenerife last November and allegations of massive fraud in the publishing empire, his sons Kevin, 33, and Ian, 36, took over the family’s business interests. But five investigations by Britain’s Serious Fraud Office-handled by a team of 55 lawyers, accountants and police officers–concluded that the Maxwell boys were embroiled in last-ditch attempts to prop up their father’s debt-ridden network of 400 companies.
Investigators charge that Kevin Maxwell stole pension-fund money and together the brothers conspired to defraud a bank. Kevin was allegedly aided by Larry Trachtenberg, 38, an American financier who helped run Bishopsgate Investment Management, which directed the investments of the pension funds of Maxwell companies. Trachtenberg, also arrested on Thursday, and Kevin Maxwell are accused of stealing $13 million from Mirror Group Newspapers; the pair also faces charges of plotting to cheat the Swiss Bank Corp. of $102 million, obtaining the cash by using securities belonging to a Tokyo bank as collateral. Ian Maxwell, former head of MGN, faces charges of defrauding the Swiss Volks Bank. Kevin intends to contest the charges, and the others have had no comment. Because of the complexity of the case, a trial may not take place until 1994.
Even that prospect offers little comfort to 32,000 present and former Maxwell employees whose pensions are now at risk. Investigators say much of their money may have reached secret trusts in Liechtenstein-beyond reach of the British courts. An additional $403 million was pledged as security to cover Maxwell’s loans and is now part of a legal tussle between banks and liquidators. Only some of the $444 million transferred to the soon-to-be-liquidated Robert Maxwell Group is certain to be recovered. “If I robbed a bank, I would go to jail,” says Maxwell pensioner Ivy Needham, a half-blind, 66-year-old Leeds widow. " What Maxwell did was worse," she said of Robert. “He robbed the poor to pay the rich-himself.”
Though the scandal has destroyed the Maxwells’ reputation, the family can hardly plead poverty. Widow Elizabeth has reportedly moved out of her home near Oxford and creditors may seize the $3.7 million Maxwell left to family and friends. Yet the brothers still reside in extravagant London homes, and Kevin sends his children to private schools. They haven’t given up entrepreneurship: in early June Kevin and Ian announced a new multi continental media venture and sought to raise $18.6 million. In the Maxwell family, it appears, audacity is an inherited trait.
