Helmut Kiener, the K1 Group hedge fund founder under arrest in Germany on suspicion of fraud, is seeking to sell his oceanfront home in Delray Beach for $23 million to repay investors, people briefed on the matter said.

Kiener owns the 14,000 square-foot house through Miami-based Consistent Income, whose managing member is Stefan R. Seuss, the sources said, speaking anonymously because the probe isn't complete.

Seuss was arrested at his Coconut Grove home last week in a Federal Bureau of Investigation money-laundering sting and is tied to an international probe of Kiener, people familiar with the matter have said. He agreed to be transferred to Philadelphia, where a grand jury has indicted him in the money-laundering conspiracy case.

Seuss allegedly specialized in transferring money from the United States to offshore companies in the British Virgin Islands and elsewhere -- and then to foreign bank accounts, according to an indictment.

K1 Group is at the center of a criminal investigation after allegedly saddling banks, including JPMorgan Chase & Co. and Societe Generale, with about $400 million in losses, people with knowledge of the probe said.

European and U.S. authorities are investigating whether K1, which manages funds of hedge funds, deceived the banks while seeking money to ratchet up its investments.

Kiener may have duped Barclays out of as much as $220 million and BNP Paribas out of $60 million, according to the warrant for his arrest.

Funds were diverted through a network of Cayman Island-based companies, the warrant for Kiener's arrest said. The money was used to acquire two airplanes and a helicopter, and some money was allegedly also channeled to acquire two properties in Miami, helping Kiener support a ``luxury lifestyle,'' the warrant said.

Kiener's German lawyer, Lutz Libbertz, said he didn't know what properties Kiener owned in the U.S.

Kiener's Delray Beach home, which was put on sale in May, is a three-story Georgian. It features several chandeliers -- including one above an oval bath tub, a two-story wood-paneled library and ``exotic marble and onyx throughout,'' according to the home's listing on the website of Premier Estate Properties.

A Cayman Islands' liquidator is selling Kiener's Delray Beach property, said sources.

``They are not going to get $23 million,'' said Sandra Strickland, an independent Realtor in Delray Beach.

``Right now, we are mostly flooded with $200,000-and-under properties,'' said Strickland, who estimated it's worth at about $12 million.

Among the other amenities of Kiener's home are a movie theater equipped with two rows of four leather recliners; a wine cellar; pool with summer kitchen, hot tub and bar; deep-water access; an outdoor amphitheater, and a home gym with at least five televisions hung from the ceiling, according to the website.

The house also includes a security system with multiple cameras and fingerprint access.

The Kiener property was purchased by Consistent Income in March 2007 for $19 million in cash, according to Strickland, who cited property records. It had an appraised value of $14.6 million in 2008, according to the records.

Pascal Liguori, of Premier Estate Properties, said he's shown the house ``a few times.'' He said the owner, whom he wouldn't identify, wants only prospective buyers to see it.

Kiener's house is 20 miles south of Bernard Madoff's home in Palm Beach. The U.S. Marshals Service is selling Madoff's home, listed at $8.49 million, to help pay restitution to victims of the largest Ponzi scheme in U.S. history. Madoff, 71, pleaded guilty in March to 11 counts of fraud and money laundering and was sentenced to 150 years in prison.

Miami Herald staff also contributed to this report.