Banks & Trusts

Letter to the Editor of OffshoreAlert by Noel Tait, Chairman of Windsor International Bank & Trust.

Three weeks after OffshoreAlert exposed their role in a failed hotel in Morecambe, England; Lincoln Julian Fraser and Jared Bentley Brook have resigned as Chairman and Chief Executive Officer, respectively, of the UK-based Imperial Consolidated Group, with immediate effect.

The Central Bank of the Bahamas officially revoked the banking license of Suisse Security Bank & Trust on Monday, April 2, 2001. The license had been suspended on March 5. 

Thirteen months after being exposed by OffshoreAlert as a scam, the SEC filed a civil lawsuit against Grenada-registered Wellington Bank & Trust, its principals and affiliates. The lawsuit was filed at the United States District Court for the Southern District of Indiana on February 27, 2001.

Bahamas-based Suisse Security Bank & Trust filed an application at the Bahamas Supreme Court on March 29, 2001 to reverse what it has called "a purported out-of-court appointed receivership". The Respondents in the lawsuit are Julian Francis, who is the Governor of the Central Bank of the Bahamas; the Attorney-General of the Bahamas and SSBT's Receiver, accountant Raymond Winder.

The National Commercial Bank of St. Vincent has been awarded damages by Grenada Supreme Court after its correspondent accounts were frozen in the United Kingdom by attorneys representing victims of the First International Bank of Grenada. In a decision on December 12, 2000, the court discharged an injunction that had been granted on August 11, 2000 in Grenada and September 14, 2000 in the High Court in England against NCB's assets held in correspondent accounts in the United Kingdom.

The Panama Securities Commission has turned down an investment advisor application by Harris Investment Advisory Inc., which is part of The Harris Organization group. A Commission spokesman said the application was rejected primarily because of "the number of  complaints we have received from Harris clients alleging all sorts of dubious practices".

The Chairman of the Imperial Consolidated Group was threatened with criminal action in England in 1996/97 after being accused of breaking the terms of his bankruptcy, we can disclose. Even then, it took Lincoln Julian Fraser many more months to settle a debt of GBP22,000 (approximately US$32,111) to Lincolnshire-based creditor Heckford Advertising.

An offshore mutual fund that has collapsed amid debts of $200 million and allegations of massive fraud had close links with Bahamas-based Surety Bank & Trust, OffshoreAlert can reveal. SBT's relationship with British Virgin Islands-registered Evergreen Security Ltd. appears to be the reason why the bank chose voluntary liquidation late last year over being sold as a going concern.

Two businessmen who helped run Grenada-registered Cambridge International Bank & Trust were arrested in the United States on February 28 and are being held in custody. David Frank Rowe, 52, and Gerard Michael Burns have been accused of fraud at the US District Court for the Northern District of California.

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in Trinidad & Tobago for Judicial Assistance into an allegedly fraudulent request to transfer US$373,000 from an account controlled by the Ministry of Education Secondary Modernization Programme at the Central Bank of Trinidad and Tobago to an account in the name of Resource Pioneer in Education (RESPECT) at Wells Fargo Bank in Reno, Nevada.

The next court hearing at Bahamas Supreme Court regarding an application for the reinstatement of the suspended banking license of Suisse Security Bank & Trust is due to take place later this week but a decision is not expected until later in the month at the earliest.

The High Court in Dominica has ordered that the island's regulator reinstate the banking license of British Trade & Commerce Bank, according to a report by the Caribbean News Agency (www.cananews.com/news.html).

David Frank Rowe and Gerard Michael Burns, who are or have been principals of Grenada-registered Cambridge International Bank & Trust, have been arrested in the United States and are being held without bail.

As the court battle continues today over the suspension of the banking license of Suisse Security Bank & Trust, it has emerged that the action by the Central Bank of the Bahamas in suspending the bank's license was taken despite an injunction being issued by the Bahamas Supreme Court on March 2, 2001 ordering that such action not be taken.

Letter to the Editor of OffshoreAlert from Noel Tait, Chairman of Windsor International Bank and Trust Ltd.

British Trade & Commerce Bank and Suisse Security Bank & Trust are both due to go to court tomorrow in Dominica and the Bahamas, respectively, in an attempt to win back their banking licenses. BTCB will be seeking to overturn the revocation of its license last month, while SSBT will be seeking to overturn the suspension of its license on Monday, March 5, 2001.

The Central Bank of the Bahamas confirmed to OffshoreAlert today that it suspended the banking license of Suisse Security Bank & Trust yesterday, with a view to revoking it.

The Grenada International Financial Services Authority has revoked the licenses of 17 offshore banks.

A federal judge in California has appointed a receiver to take control of any assets of VP Bank (BVI) that were earned from a hard-core pornography web-site at www.sex.com.The Receivership Order, which was issued on February 2, 2001 against convicted felon Stephen Michael Cohen, also covers the assets of two BVI-registered IBCs and other Cohen-related entities.Receiver George C. Fisher, of Palo Alto, is permitted to "locate assets of Stephen Michael Cohen, Ocean Fund International Limited, Sand Man International Limited, VP Bank (BVI) Limited directly or indirectly related to the operation of the Internet domain name 'sex.com'," reads the Order.

Imperial Consolidated PLC has followed in the footsteps of The Harris Organization and the First International Bank of Grenada and filed a libel lawsuit against OBNR and its principal, David Marchant. While the previous two lawsuits were filed at federal court in Miami, Imperial Consolidated filed its complaint at state court, specifically the Circuit Court of the Eleventh Judicial Circuit for Miami-Dade County, Florida, on February 21, 2001.

The Canadian Venture Exchange has suspended trading in the shares of two companies that are linked to insolvent Grenada-registered Cambridge International Bank & Trust. It is the latest regulatory action to be taken involving the now-defunct First International Bank of Grenada group, whose activities have been filling pages of newspapers all over the world recently.

A bank whose directors include an ex-Prime Minister, a former Governor-General and two Justices of the Peace has become Grenada's latest offshore financial institution to be implicated in fraud. A promoter and 'Honorary Director' of Windsor International Bank & Trust, Douglas E. Castle, is being sued in the United States for allegedly defrauding a client of $244,636.

Letter to Grenada Prime Minister Keith Mitchell from Virginia resident Charles O. Pratt III concerning Crown Meridian Bank.

Bank of Credit and Commerce International (in liquidation) v. Bank of America National Trust and Savings Association, BankAmerica International, and BankAmerica Corporation at the Grand Court of the Cayman Islands.

American conman Van A. Brink, the founding chairman and CEO of the First International Bank of Grenada, recently married a considerably younger local woman in Uganda, where he fled just before FIBG collapsed in 2000 with an estimated $150 million stolen from depositors.

Bahamas-based Suisse Security Bank & Trust is fighting two lawsuits in the United States which have resulted in $1.47 million of its assets being seized and another $3 million frozen. The bank is currently waiting for the outcome of an appeal against a default judgment in Florida in 1998 which will determine whether the seized $1.47 million has been lost forever.

The manager of a Nauru-registered bank that appears to be operated illegally from Nevis said he did not realize he was doing anything wrong and will take steps to correct the matter. Dennis L. Shollenburg also said that a lawsuit that has been filed against him and others in the US by plaintiffs alleging investment fraud involving his previous bank had not been served on him.

Financial institutions based in the Cayman Islands have been advised by the local Monetary Authority that they should not promote themselves "exclusively or primarily on confidentiality or secrecy".

In one of the latest lawsuits to be filed as part of the on-going Grenada banking scandal, creditors of Cambridge International Bank & Trust claim to have been defrauded of $50 million.Cambridge, which began life as a sub-bank of the First International Bank of Grenada, offered annual interest rates of up to 51 per cent per annum, according to the complaint.

A petition to wind-up the First International Bank of Grenada was filed by the Grenada government on January 12, with PricewaterhouseCoopers appointed as liquidator. In the petition, the government announced that US$206 million of clients' principal went into FIBG and that an additional US$266 million of interest is owed to creditors.

The Bank of Bermuda has taken a $10 million charge in its latest quarterly results to reflect the collapse of its investment in e-commerce firm, First Ecom.com.

Letter to Bahamas Central Bank Governor Julian Francis from FBI Agent Gerard Forrester in support of fraudulently-operated Bahamas-based Suisse Security Bank & Trust Ltd., dated January 12, 2001 - two days before Forrester retired from the FBI.

Mutual Risk Management is due to complete the purchase of Bermuda-registered financial services firm Valmet Group by January 2, 2001. In acquiring Valmet, MRM is taking over an entity that has received much international publicity over the last few years due to its ties with Russia.

Nevis-based offshore provider Robin Cotterell claims that US investigators asked him to disclose confidential information on his firm's clients in return for leniency on money laundering charges. Details of a failed attempt to persuade Cotterell to break Nevis' confidentiality laws are contained in a statement issued on his behalf following his acquittal on November 28, 2000.

A claim by Dominica-based British Trade & Commerce Bank that its liquidity problem is substantially due to having its assets frozen by a Canadian court is in dispute. The Plaintiffs in the only known lawsuit against BTCB in Canada told Offshore Alert that no assets have been frozen as a result of the action, which contradicts BTCB's public stance.

The UK-based Imperial Consolidated Group has suffered another blow with the forced termination of its HINT MasterCard offshore credit card program, which was operated from the Bahamas. Leadenhall Bank & Trust, which issued the card, and Axxess International, which administered it, withdrew their support in November due to concerns over Imperial Consolidated's credibility.

Grenada's oldest offshore bank, Bank Crozier, is moving its headquarters to St. Lucia, where it has become the first bank to be licensed under the International Banks Act 1999. The Swedish-owned bank, which began operations in Grenada in 1997, expects to complete the move in the New Year.

Offshore Alert has uncovered another dubious investment fund being promoted by The Harris Organization financial services group of Panama. The objective of the Washington Pacific Investment Fund is "to achieve a rate of return of 100% per annum" by investing in "mortgage backed securities and liens", according to a prospectus.

Final Judgment against Syed Asadullah Kazmi in Gulf Union Bank (Bahamas) Limited v. Sheik Abdus Shimmy Quraeshi, Escue Management, Inc., Shahid S. Quraeshi, Crown Capital Advisors, Sohail S. Quraeshi, and Syed Asadullah Kazmi at the U. S. Bankruptcy Court for the Southern District of Florida.

The Bahamas-based HINT MasterCard credit card program that was offered by the Imperial Consolidated Group has been terminated by the issuing bank, Leadenhall Bank & Trust, and the data processor, Axxess International, which are both based in the Bahamas. In other news, Brent Wagman has been sentenced to five years in prison in Texas and fined $19.7 million for investment fraud.

Motion for Final Judgment Against Syed Asadullah Kazmi in Gulf Union Bank (Bahamas) Limited v. Sheik Abdus Shimmy Quraeshi, Escue Management, Inc., Shahid S. Quraeshi, Crown Capital Advisors, Sohail S. Quraeshi, and Syed Asadullah Kazmi at the U. S. Bankruptcy Court for the Southern District of Florida.

Investors who bought Bank of Bermuda stock recently in anticipation of a favorable government decision that would allow its shares to be listed on an overseas stock exchange have been rewarded.On December 8, 2000, Bermuda Minister of Finance Eugene Cox publicly disclosed that the bank, which is generally considered to be the biggest offshore bank, had been given an exemption from the law that prohibits foreign ownership of local companies to exceed 40 per cent.

Some of the biggest names in offshore finance have been named as defendants in a civil lawsuit filed in the United States by investors who claim to have been defrauded of $5 million. Defendants are Matheson Trustees (BVI) Limited, Matheson Trust Company (BVI) Limited, Bank of Bermuda, Credit Suisse, of Switzerland; UBS, of Switzerland; and KPMG, of the British Virgin Islands.

A default judgment has been entered against the Bank of Bermuda in a racketeering lawsuit filed by the Receiver of the alleged $300 million Ponzi scheme known as Cash 4 Titles. The judgment was entered against the Bank of Bermuda Ltd. and the Bank of Bermuda (Cayman) Ltd. on November 20, 2000 at the U. S. District Court for the Northern District of Illinois.

The Nevis government has separated its Marketing/Promotion division from its Regulation/Supervision division of its financial services sector in an attempt to improve its much-criticized level of regulation. Thomas Peacock has been appointed as Regulator for Financial Services, while Agatha Jeffers-Gooden has been appointed as Director of Development and Marketing, both effective October 1, 2000.

Regulators in Grenada are continuing to allow banks belonging to the First International Bank of Grenada group to operate on the island despite FIBG's massive insolvency, we can reveal. The National Commercial Bank of St. Vincent, which is government-owned, is also continuing to provide banking services despite having its UK assets frozen recently over the FIBG fiasco.

Dominica-licensed British Trade & Commerce Bank appears to be on its last legs, if a recent letter to clients from the bank's President, Rodolfo Requena, is anything to go by. In the letter, Requena seems to be digging the bank into a deeper hole by offering rates of return of up to 50 per cent for clients who delay making withdrawals.

Nevis-based offshore provider Robin Cotterell has been acquitted of criminal money laundering charges following a jury trial at the U. S. District Court for the Southern District of New York. After a trial that lasted eight days, British-born Cotterell was unanimously acquitted on November 29, 2000 on one count of money laundering and one count of conspiracy to commit money laundering.

Bahamas-based Surety Bank & Trust is to go into voluntary liquidation after its banking license was suspended by the Central Bank of the Bahamas. The license was suspended on November 23, 2000 for a breach of Section 11 of the Banks and Trust Companies Regulations Act, which deals with capital adequacy and reporting requirements.