Investment

An ordinary IBC in Nevis that operates as an unlicensed mutual fund has collapsed owing an estimated $50 million to approximately 1,100 shareholders.Approximately $100 million is believed to have gone into The Genesis Fund Ltd. but about half of it was repaid as interest payments, according to a client's representative.

A principal of an unlicensed mutual fund incorporated in the British Virgin Islands and managed in Florida was sentenced in October to serve six to 18 years in state prison in the United States.William J. Zylka, who helped to operate Evergreen Security Ltd., had previously pleaded guilty to multiple counts of grand larceny, fraud and conspiracy at New York State Supreme Court.

A well-publicized IRS investigation into the activities of U. S. citizen Jerome Schneider has done little to dampen his enthusiasm for aggressively promoting dubious offshore products.In October, OffshoreAlert was a recipient of a mass mailed, 24-page, color, glossy promotional brochure from Schneider titled "New Wealth Perspectives".

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in the United Kingdom into alleged fraud by John Abrahamson, Geoffrey Brailey, Roger Eden and Jeffrey Fowler, who were all former directors of Corporate Services Group Plc.

First Amended Complaint in SEC v. Florida Stock Transfer, Inc., Vector Holdings Corporation, and Allen Weintraub at the U. S. District Court for the Southern District of Florida.

Complaint in Glade W. James, individually and as Trustee; Kirt W. James, Intrepid International Ltd., HJS Financial Services, Inc., Shibewalt Management, Inc., Intrepid International SA, Oasis Entertainment, LLC, Oasis Entertainment's Fourth Movie Project, Oasis Entertainment Corp, and Glenneyre Capital Corp. v. Richard Day, American Registrar & Transfer Co., Greg Harry, Jeff Harry, Jenna Harry, William S. Stocker, J. Dan Sifford, Jr., Karl E. Rodriguez, Karl E. Rodriguez Ltd., JeffJena Ltd., Anneius Equity Management, Inc., Polyandrous Trading Group Ltd., Exim International Inc., Glenneyre Equity Group Ltd., Dana Leasing, Inc., Patagonia Development SA, Patagonia Commercial SA, Quicksilver Development SA, Marshall Worldwide Ltd., Titan Capital SA, B&V Union Technologies Inc., Jozette Jamie Lee, Pam Fernley, Gaynell T. Harry, The Leeward Family Trust, The Albright Living Trust, Laurencio Jaen, Leopoldo Kennion, Teodoro F. Franco, Nixia Aurora Zerna, Kevin Harrington, Tim Harrington, Reliant Interactive Media Corp., Union Bank of California, Union Securities Ltd., Dominic Busto, Madison Stock Transfer, Inc., Michael Ajzenman, Bank of Montreal, Deborah Caldwell, Equitrade Securities Inc., Don Carrig, Stephen H. Roebuck, Kim Carroll, Canaccord Capital Corp., Brad Scharfe, John Skinner, MJK Clearing Services, Royal Bank of Canada, West America Securities, Banco de Costa Rica, Yorkton Securities, Tar Financial Group Inc., Cal Meese, Tarja Mordo, Morgan Stanley Dean Witter & Co., Richard Frank, Emily Ysais, Global Securities, Steve Regoci, Dundee Securities, John Horword, ED&P Investments AG, Erwin Haas, MFC Merchant Bank SA, Marta Pardo, Michael Smith, Golden Capital Securities, Ltd., Mellon Securities Trust Corp., Swiss American Securities, Lines Overseas Management, Trevo Kidd, Cardinal Capital Management Inc., Chris Dorst, Bank August Roth AG, Credit Lyonnais (Schweiz) AG, Bank Sal. Oppenheim jr. & Cie. (Schweiz) Ltd., Public Securities, and Michael Bascetta at the U. S. District Court for the District of Utah.

Imperial Consolidated administrator Mazars Neville is warning victims of the Imperial fraud to be wary of approaches for money by Weddington Holdings Ltd., which may be an advance fee fraud.Weddington has been telephoning and emailing clients of Imperial and asking them for $2,500 each to purportedly fund an "Asset Recovery Program" outside of that being conducted by Mazars Neville.

Promotional Brochure for the Tulip Fund, a short-lived, unlicensed investment fund in Panama - October 12, 2002

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in the United Kingdom into suspected investment fraud by William Booth Cook and Donald Nutter.

First Amended Complaint in Endovasc Ltd. Inc. v. J.P. Turner & Co. LLC, KCM Group LLC, The Keshet Fund LP, Sichenzia Ross & Friedman LLP, Keshet LP, Nesher Ltd., Talbiya B. Investments Ltd., Balmore Funds SA, David Grin, LH Financial Services Corp., Laurus Master Fund Ltd., Laurus Capital Management LLC, Celeste Trust Reg, and Patrick Power at the U. S. District Court for the Southern District of New York.

Complaint alleging fraud in Commodity Futures Trading Commission v. Sterling forex LLC and Maurice L. Mills at the U. S. District Court for the Western District of Washington.

ARGENTINAMenem off the hook, for the moment Judge Julio Speroni concluded there is not enough evidence to indict former President Carlos Menem in the case of the illegal arms sale to Croatia and Ecuador. Judge Speroni added, though, that Menem

The Imperial Consolidated fraud has taken a further turn for the bizarre with the distribution in September of several press releases, masquerading as news stories, by a newly incorporated British company called Matrix International (Management) Ltd., whose commercial address is

Bermuda company director Paul Lemmon has been refused bail in the United States after the judge ruled there was a "serious risk" that he would flee or obstruct justice if released on bail."The weight of the evidence against the Defendant

Crisis firm Stirling Cooke Brown Holdings has changed its name to AlphaStar Insurance Group Ltd., effective September 30, in its latest attempt to shed itself of its poor image.The firm stated that its "Board of Directors had decided that a

Businessman Dennis S. Herula, who was jailed for one month in Bermuda nine months ago trying to open a bank account with false documents, is facing prison again - this time in his native United States.A hearing has been set

A second arbitration award has been issued against International Depository Trust Corporation, which is operated by alleged mafia associate Joseph Andy Mann and Nevis based offshore provider Robin Cotterell.An application to confirm the award was filed at the United States

A United States national who was once appointed a 'Roving Ambassador' to the Caribbean island of Grenada has had a $30 million default judgment entered against him in the United States.Eric E. Resteiner, a one time resident of the Bahamas,

Florida based businessman David H. Siegel looks set to become the latest suspected investment fraudster to choose money over prison.The SEC filed a contempt of court motion against 65 year old Siegel on September 27, 2002 after he failed to

Thierry Nano, who is wanted in the United States on suspicion of money laundering, has filed a civil complaint in New York against the liquidator of his offshore banks.Defendants in the action are PricewaterhouseCoopers and Marcus A. Wide, a PWC

A twice bankrupt businessman who once fell victim to a foreign currency exchange scam is promoting his own Forex scheme and telling participants it is "realistic" to expect monthly returns of four per cent.Maurice Lewis Mills, 37, operates Washington State-based Sterling forex LLC, which claims it has "fulfilled CFTC Compliance requirements to offer forex trading advisory services to U.S. Clients".

The Genesis Fund Ltd. Equity Recovery Plan - September 24, 2002

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in Belgium into Jozef Lernout, Pol Hauspie and Lernout & Hauspie for alleged fraud.

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in Brazil into allegations of money laundering, corruption, deviation of public funds and illegal trading in false securities involving Wagner Baptista Ramos and others.

Complaint in Endovasc Ltd. Inc. v. J.P. Turner & Co. LLC, KCM Group LLC, Kingdon Capital Management LLC, The Keshet Fund LP, Sichenzia Ross & Friedman LLP, Keshet LP, Nesher Ltd., Talbiya B. Investments Ltd., Balmore Funds SA, David Grin, LH Financial Services Corp., Laurus Master Fund Ltd., Laurus Capital Management LLC, Celeste Trust Reg, and Patrick Power at the U. S. District Court for the Southern District of New York.

Criminal Complaint in USA v. Sylvia Hermann, a.k.a. Sylvia A. Ilcken, at the U. S. District Court for the Central District of California.

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in Belgium into Jozef Lernaut, Pol Haupsieof Lernaut & Hauspie and Lernout & Hauspie Speech Products for alleged fraud, forgery, insider dealing and price manipulation.

Defendant's Objection to Presentence Report and Motion for Downward Departure in USA v. Richard F. Downes at the U. S. District Court for the Southern District of Florida.

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in Germany into Edmund Ballier, Friedrich-Karl Gradl, Detlev Pinnow, Gerd Ullrich, Fritz-Heinz Bosking, Wolfgang Hummer, Philipp Schauer, Ludwig Schauer and others for alleged fraud.

Application for the appointment of a Commissioner to collect evidence for a criminal investigation in Switzerland into Hans Josef Ludwig, Georg Eduard von Boguslawski, Robert Schoch and Lidia Santangelo-Ortoleva for alleged fraud involving Henderson Pacific Private Bank and Henderson Pacific Financial Services AG.

Bermuda-based Norwegian con man Vidar Lunoe, whose fraud victims included his own friends, was sentenced to three and a half years in prison on August 14.Lunoe, who also has British citizenship, admitted defrauding victims out of $1,078,000 during proceedings at Bermuda Magistrates Court.

Recently-Filed Actions by Securities Regulators Around the World.

A legal dispute in the United States between Lazard Freres and the former portfolio managers of a now-defunct offshore mutual fund has spilled over to Bermuda.Lazard Debt Recovery Fund Ltd., which is registered in Bermuda, filed a lawsuit against Michael A. Weinstock, of New Jersey, at Bermuda Supreme Court on August 21, 2002.

A new investment scam that has arisen out of the ashes of the failed Imperial Consolidated Group is being run along virtually identical lines, OffshoreAlert can reveal. Potential investors in a British Virgin Islands-registered firm doing business as 'Property International' are being offered annual interest rates of 18 per cent by Imperial's former management and promoters.

Two businessmen whose interests have included Bahamas investment firms and a Bermuda reinsurer have been criminally indicted in the United States for their alleged involvement in a massive investment fraud.Jon Knight, 56, and J. Anthony Huggins, 63, stole $6.5 million from an account at the Bank of Butterfield in the name of British Virgin Islands-registered Evergreen Security, according to the complaint.

In the 'Corruptions Perceptions Index 2002' recently published by Transparency International, Costa Rica was perceived to be the 40th most corrupt of 102 countries reviewed.That might change, however, following two recent incidents in a country that has become a magnet for North American investment fraudsters fleeing criminal investigations in their home countries.

A United States-based promoter of sham offshore investment products has been sentenced to eight years in prison after being convicted of securities fraud in Texas. Cameron O. Bailey was also fined a total of $6,000 and ordered to pay restitution to his victims when he was sentenced on August 29, 2002 at the 283rd District Court for Dallas, in Dallas County, Texas.

The farce that is Brek Energy continued in August with the reporting of yet another quarterly loss and a restatement of previous earnings because the firm had classified some expense as revenue.Brek, into which the Bank of Bermuda and clients of Bermuda-based Lines Overseas Management invested in excess of $28 million, reported a net loss of $3.4 million for the quarter ended June 30, 2002.

Bahamas accountant Michael M. Hepburn, who has been arrested and charged with money laundering in Miami, has a history of involvement with crooked companies, OffshoreAlert can reveal. Hepburn, 54, has provided fake audits for several offshore insurers that have collapsed amid heavy losses and allegations of impropriety, including Paramount Reinsurance Ltd., formerly First Reinsurance Ltd., of Barbados; and Alpine Assurance Ltd. and Savoy Reinsurance Co. Ltd., both of the Turks & Caicos Islands.

Two men whose involvement in sham offshore credit unions was exposed by OffshoreAlert last year have been charged with defrauding a 100-year-old widow out of more than $6 million in the United States.Dale A. Erickson, 53, and Darryl K. Willis were arrested on June 27, 2002 in Connecticut and Montana, respectively, and are currently in custody, with bail set at $2.5 million for Erickson and $100,000 cash, plus conditions, for Willis.

Investors Bank and Trust Ltd., formerly known as Overseas Development Bank and Trust Ltd., has been taken over by regulators in its home jurisdiction of Dominica.PricewaterhouseCoopers was appointed controller of the bank on August 20, 2002 because IBT was "insolvent" and "unable to meet its obligations", according to Prime Minister Pierre Charles.

Five Bermuda residents, including Marsh Management's second-ranking officer on the island, are among worldwide victims of a massive investment fraud. Rory Gorman was a client of the Imperial Consolidated Group, which went into administration in the United Kingdom in June with liabilities of $345 million. Gorman is the Managing Director/Client Services of Marsh Management Services (Bermuda) Ltd., which describes itself as the "world leader in the management of captive insurance companies".

Canadian authorities who took part in Operation 'Bermuda Short' which led to 58 indictments, including two directors of a Bermuda-based firm, have praised offshore regulators for their level of co-operation."It's a fallacy that offshore centers do not co-operate with such investigations," said Garry W. G. Clement, Superintendent with the Royal Canadian Mounted Police, told OffshoreAlert. 

New evidence obtained by OffshoreAlert shows that THREE convicted drug dealers are beneficial owners of the British Virgin Islands-registered parent of The Harris Organization financial services group. The traffickers all own preferred shares, which purport to pay annual interest of 10% in the case of Wallace Stull and James Somerville, and 7% for Lawrence Boulanger.

Computer hackers have unsuccessfully attempted to steal $7 million from an alternative currency firm linked with offshore provider Terry Neal.News of the incident is contained on the web-site of Crowne Gold, which operates from addresses in Grenada and St. Kitts.

Selected Clients of The Harris Organization - August 31, 2002

Letter to the Editor of OffshoreAlert from the son of an alleged victim of Marc Harris.

Application for the appointment of a Commissioner to collect evidence from Pinebank - pursuant to a request for judicial assistance from the United Kingdom - for a criminal investigation into "Kevin Dooley, John Silver and others for theft and conspiracy to defraud".

Application for the appointment of a Commissioner for a criminal investigation in the United Kingdom into alleged fraud by James Cadwell, Richard Pope and David Curley.

Judgment in a Criminal Case in USA v. Brian Boeger at the U. S. District Court for the Southern District of Florida.