Fugitive Wall Street broker detained in Spain

MADRID, Spain (CNN) - Investigators in Spain have detained a former Wall Street broker who vanished while on house arrest in the United States, they said Thursday.

The U.S. Securities and Exchange Commission charged Julian Tzolov last fall with securities fraud. It said he and a partner defrauded customers when making more than $1 billion in unauthorized securities purchases, including some related to subprime mortgages.

Tzolov vanished while under house arrest in May, just days after his lawyer said he planned to plead guilty, the Spanish Interior Ministry said Thursday in a statement.

Agents with Spain's national police force arrested Tzolov in the city of Marbella, on Spain's southern coast, the statement said.

Investigators in the United States had asked international law-enforcement agencies to help find Tzolov amid allegations that he swindled customers out of more than $400 million, the statement said.

Tzolov was a corporate vice-president at Credit Suisse in New York, but he carried a fake identification with the name Ivan Stefanov Ivanov when agents arrested him, the Interior Ministry said.

The Securities and Exchange Commission alleges that Tzolov and a partner, Eric Butler, misled customers into believing that the customers were buying securities that were backed by federally guaranteed student loans and were a safe alternative to bank deposits or money market funds, a commission statement said.

"Instead, the securities that Tzolov and Butler purchased for their customers were backed by subprime mortgages ... and other non-student loan collateral," the statement said.

Federal investigators charged Tzolov and Butler in September 2008 with securities fraud.