First International Bank of Grenada

In the late 1990s, the Government of Grenada licensed more than 40 offshore banks, virtually all of which were overtly fraudulent. Several of the licenses were given to the First International Bank of Grenada group, which had 182 telephone and fax numbers registered with Cable & Wireless in Grenada and, apart from banks, also included a stock exchange, an insurer, and a registered agent. With bogus initial capital of $32 million, comprising worthless shares in a sham investment fund that had false NAVs and a photo of a ruby that it did not even own, FIBG took in more than $200 million from investors who were offered annual interest of up to 250% and told their principal and returns were “insured” and “guaranteed”. After OffshoreAlert exposed FIBG in 1999, the bank sued for libel at federal court in Miami and sought an injunction to prevent further publication, supported by an affidavit from Grenada’s financial services regulator, Michael Creft. When five of the bank’s principals were criminally indicted in Oregon two years later, Creft admitted to U.S. prosecutors that he had committed perjury when testifying against OffshoreAlert in the libel action and that he and Grenada’s Prime Minister, Keith Mitchell, had received bribes from FIBG. After the bank collapsed, two of its principals fled to Uganda, where they were arrested in a shoot-out with police in which their bodyguard was killed and deported to the U.S., where they and three others had been indicted for fraud and money laundering. One defendant died pending trial and the other four pleaded guilty to money laundering, for which they received prison terms.