Barclays Bank continued processing checks for an offshore-based wine investment group even after it learned of a regulatory warning in the U. S. and then then refused to co-operate with the group's liquidator after it collapsed amid allegations of fraud, it has been claimed.The allegations are contained in a civil complaint filed by Christopher Johnson, as liquidator of Cayman Islands-registered Architects of Wine Ltd., at the U. K. High Court of Justice, Queen's Bench Division, Commercial Court on March 9, 2006. AOWL is seeking to recover $1.3 million from sole defendant Barclays Bank, of London, England, alleging conversion.
Bahamas-based Suisse Security Bank & Trust Ltd., which may be insolvent by as much as $29 million, has lost a four-year fight to regain its bank license. In a judgment issued yesterday, the Privy Council in the United Kingdom dismissed an appeal by SSBT against a ruling on June 29, 2004 by the Court of Appeal of the Bahamas that upheld the revocation of SSBT's license by the Governor of the local Central Bank, effective April 2, 2001.
The liquidators of fraudulently-operated offshore stock-broker SEGOES Services Ltd. ran up a $1.49 million deficit during their first eight months in charge of the company.That was the figure that leapt out of the Third Interim Report to Customers and Creditors, dated January 27, 2006, by liquidators Kenneth Krys and Christopher Stride.
Bahamas-based Leadenhall Bank & Trust Ltd., which was closed down by regulators seven months ago, may be insolvent by more than $11 million. That was the glum news for creditors in the first report of liquidator Craig A. (Tony) Gomez on December 9, 2005. On paper, the bank had shareholders' equity of $1.6 million as of October 3, 2005, with assets of $29,864,139, including $20.4 million in cash, and liabilities of $28,235,807. “However my review has revealed that the balance sheet includes loans and past due credit card receivables totaling $6.6 and $6.3 million, respectively, and that both balances are either unsecured or inadequately collateralized,” stated Gomez in his report.
Fund administrator Citco knew that Lancer Offshore was fraudulently valuing assets nearly two years before the fund collapsed but its sole concern was how to extricate itself from the $400 million insolvency, rather than warn investors and regulators. That is the most serious allegation contained in a civil lawsuit that was filed as long ago as January 14, 2005 at the U. S. District Court for the Southern District of Florida but kept sealed until February 21, 2006 due to concerns that its release may breach a court order prohibiting disclosure of certain information. It is supported by copies of extraordinary email exchanges between Citco's senior executives that were disclosed in discovery that Citco opposed.
The Bankruptcy Trustee of the Bermuda-based group formerly known as Stirling Cooke has received court approval to subpoenas to three former officers as part of an investigation into its financial affairs. In an order dated December 19, 2005, U. S. Bankruptcy Judge Stuart M. Bernstein, sitting at the U. S. Bankruptcy Court for the Southern District of New York, ordered that subpoenas can be served on former officers Stephen A. Crane, President, Chairman, and CEO; Anthony J. Del Tufo, Chief Financial Officer; and James Lawless, General Counsel, compelling them to provide documents and oral testimony.
The Receiver for the Lancer Offshore group has filed four new lawsuits against parties in Bermuda, the Bahamas, the United States, Monaco, and France in an attempt to recover $1.48 million. All of the actions were filed at the U. S. District Court for the Southern District of Florida on January 11, 2006 by Marty Steinberg, as court-appointed Receiver for Lancer Management Group LLC, Lancer Management Group II LLC, Lancer Offshore Inc., OmniFund Ltd., LSPV Inc., LSPV LLC, Alpha Omega Group Inc., and G.H. Associates LLC.
A Japanese pension fund that invested 80% of its assets in a British litigation funding scam has been advised to write-off its $125 million investment. That was the recommendation of Hori Hiroshi Law Office, which the All Japan Liquor Merchants Association hired to look into the mess and advise how to proceed.
Five banks have been ordered to provide details of accounts maintained by the AlphaStar group of companies, formerly known as Stirling Cooke Brown, to its Bankruptcy Trustee.An order directing The Bank of N.T. Butterfield & Son Ltd., Wachovia Bank, Bank of America, North Fork Bank and JP Morgan Chase Bank, NA to turn over the records to Trustee Richard O'Connell was issued at the U. S. Bankruptcy Court for the Southern District of New York on September 22, 2005.
A Cayman Islands judge has put back a key ruling in a battle for control of an offshore hedge fund that is part of a failed North American group whose losses are estimated at US$179 million.Justice Henderson, sitting at the Grand Court of the Cayman Islands, must decide whether to grant a petition to liquidate Philadelphia Alternative Asset Fund Limited by five investors who claim to have collectively invested $32 million in the Fund.
The liquidators of an offshore broker have applied to stay a civil lawsuit that has been filed in the United States against the firm's former President.A hearing on the motion by the liquidators of Cayman Islands-based SEGOES Services Ltd. has been scheduled for December 8, 2005 at the U. S. Bankruptcy Court for the Southern District of Florida.
The latest estimate by the liquidators of offshore securities broker SEGOES Services Ltd. puts the firm's insolvency at between US$15 million and US$25 million.The figure was included in a civil lawsuit filed against former SEGOES directors and officers John Kaweske and James Fontanetta at the Grand Court of the Cayman Islands on August 17, 2005.
One of the key figures in an offshore investment fraud has been sentenced to 37 months in prison and ordered to pay restitution of $124 million.Robert W. Boyd was sentenced at the U. S. District Court for the Middle District of Florida on August 22, 2005 for his role in the operation of Evergreen Security Ltd., an unlicensed investment fund that was incorporated in the British Virgin Islands but largely operated from the United States and the Bahamas.
The owner of a failed offshore securities broker that apparently defrauded clients out of millions of dollars has attempted to breach an asset freeze order, it has been claimed.Details of the allegation against John Kaweske Jr. are contained in the first interim report of the joint official liquidators of SEGOES Services Ltd. to customers and creditors, which is dated July 7, 2005 but only publicly released on August 3.
Investment fraudster Ian Renert has been severely criticized by a judge in the Bahamas, who accused him of “duplicity and dishonesty” and of abusing the legal system during four years of litigation.After defrauding investors in his offshore hedge funds, Renert then sought to mislead the judiciary in an effort to impede civil and criminal investigations into his activities by the Securities Commission of the Bahamas, the SEC in the United States and an unidentified U. S. law enforcement agency, stated Mr. Justice Lyons in a ruling on June 21, 2005.
About 80 per cent of all assets realized in the first 12 months of the liquidation of British litigation funding firm Invaro Ltd. have gone to a Canadian shell entity controlled by serial fraudster Bill Godley. That was the statistic that jumped out of the first report to creditors and members by liquidators Tony Murphy, Robert Horton and Henry Shinners, of Smith & Williamson, on July 21, 2005.
Leadenhall Bank & Trust Company Limited has had its bank and trust license suspended by the Central Bank of the Bahamas and gone into Receivership.The Central Bank did not go into details about the reasons for its actions in a public announcement yesterday but stated the measures were intended "to protect the interests of depositors".
An investment firm in the British Virgin Islands and a related offshore bank in Antigua have gone into liquidation with combined liabilities estimated at hundreds of millions of dollars.Alsace Lorraine Investment Services went into liquidation at the BVI High Court on January 28, 2005, with Glenn Harrigan and Simon Whicker, of KPMG in the BVI and Cayman, respectively, appointed joint liquidators. Eleven days later on February 8, 2005, Bank of Europe Limited was placed into liquidation by the High Court in Antigua & Barbuda, with Peter Queeley and Hugh Henry appointed joint liquidators. The Bank had previously gone into receivership on December 4, 2004.
Liquidators of Cayman Islands-based securities broker SEGOES Services Ltd., formerly SEGOES Securities, are still unclear as to the extent of its insolvency.In a press release on June 6, 2005, nearly five weeks after they took control of the company, they stated they had identified total assets of US$13 million.
The amount of client funds misappropriated from offshore stock-broker SEGOES Services Ltd. may exceed US$15 million, according to the first interim report to creditors. That is how much was transferred from a group account "to a beneficiary as yet unidentified" on November 17, 2004, stated Kenneth Krys and Christopher Stride, whose status changed from joint provisional liquidators to joint liquidators on May 20 after it was determined the SEGOES group could not continue as a going concern and should be wound-up.
Five people in California and three others in Costa Rica were arrested in May for allegedly swindling hundreds of investors out of tens of millions of dollars from 1994 to 2002 in an offshore investment scam.The arrests followed an 83-count indictment - unsealed on May 13, 2005 - at the U. S. District Court for the Central District of California concerning an unlicensed investment fund known as the Genesis Fund.
The liquidator of a fraudulently-operated offshore bank has taken steps to prevent a California-based CPA from obtaining a "preferred" recovery.Marcus Wide, liquidator of Mariner International Bank, of St. Vincent & the Grenadines, filed a petition against Sandy Magid, as successor Trustee of the Alta Trust dated June 30,1999; Challenge Financial Services LLC, f.k.a. VanCleave Enterprises LLC, and Challenge Realty Inc., which are both incorporated in Nevada and based in Winter Park, Florida, at the U. S. Bankruptcy Court for the Middle District of Florida on May 31, 2005.
Former hedge fund boss Michael Lauer's "girlfriends" and stock "valuation shills" are among the defendants in the latest lawsuit filed in Miami by the Receiver of the Lancer Offshore group. "Lauer would often use the Girlfriends to assist him in violating his duties to the Funds by placing valuable assets, including aircraft and cash, in their names in an effort to prevent investors and/or the SEC from seizing such assets," stated the complaint.
Failed hedge fund Evergreen Security has recovered $3.7 million from Bahamas-based Surety Bank & Trust Ltd. (in liquidation). The recovery represents funds that were allegedly stolen by Thomas Spencer and Robert Boyd, who were founders of Evergreen and shareholders of the bank.
Civil complaints have been brought against parties from nine countries, including former Sotheby's Chairman Alfred Taubman, in an attempt by the Receiver for the failed Lancer Offshore group of hedge funds to recover allegedly fraudulent transfers. Among the defendants in two actions filed at the U. S. District Court for the District of Florida this month are companies from Bermuda, Canada, Isle of Man, Netherlands Antilles, Jersey, Kuwait, Switzerland, the United States and the United Kingdom.
Another lawsuit has been filed against the Citco Group concerning its administration of the Lancer group of hedge funds, which collapsed in 2003 with a net insolvency estimated at hundreds of millions of dollars. The latest complaint was filed at the U. S. District Court for the Southern District of Florida on January 11, 2005 by Marty Steinberg, as court-appointed receiver of Lancer Offshore Inc., and The OmniFund Ltd., both of the British Virgin Islands.
A deep rift has developed between the SEC's Receiver of the failed Lancer hedge fund group and the majority of its investors. The group of investors, who claim to have invested more than $570 million in Lancer Offshore Inc. and The OmniFund Ltd., have accused Marty Steinberg of "antagonism" and a lack of co-operation.
The SEC's Receiver of the Lancer Offshore Group has filed a civil complaint against the hedge funds' former auditors. Marty Steinberg, in his capacity as court-appointed receiver of Lancer Offshore Inc. and The OmniFund Ltd., alleges professional malpractice and gross negligence in an action that was filed at the U. S. District Court for the Southern District of Florida on December 2, 2004.
OffshoreAlert has found two more civil lawsuits filed by the Receiver of Lancer Offshore and related parties against alleged recipients of money transfers from the failed hedge fund group.Last month, we reported that Marty Steinberg had filed a lawsuit on July 9, 2004 at the U. S. District Court for the Southern District of Florida against 26 defendants - mainly financial institutions - in which he sought more than $17 million.
The Receiver of the Lancer Offshore group has filed a lawsuit against 26 financial institutions and other firms in an attempt to recover more than $17 million of allegedly fraudulent transfers.Defendants include companies from Bahrain, Bermuda, Canada, the Cayman Islands, Guernsey, the Isle of Man, Luxembourg, Monaco, Switzerland, the United Kingdom, and the United States.
The principal of a British Virgin Islands-registered hedge fund administered by the Bank of Bermuda has been arrested in Hong Kong on suspicion of defrauding investors of approximately $56 million. Charles Schmitt, who operated the CSA Absolute Return Fund Ltd., was released on bail on June 17 pending further investigation by local police and the Hong Kong's Securities & Futures Commission.
Eighty-six investors from 19 countries who claim to have invested more than $570 million in the Lancer Offshore Group have filed a lawsuit against its directors, administrator, auditor and prime broker. The three biggest claimants are all based in Montreal, Canada: Fondation Lucie et Andre Chagnon, a charity with a claim for $100 million; Bombardier Inc., the world's biggest train maker and third largest civil aircraft manufacturer whose pension fund has a claim for $68 million; and the University of Montreal's pension fund, with a claim for $67 million.
A slew of lawsuits concerning the collapse of Bermuda-based captive First Virginia Reinsurance Ltd. have been stayed pending a ruling on which United States court should have jurisdiction. All proceedings have come to a temporary halt while a 'Judicial Panel on Multidistrict Litigation' considers a motion by three of the defendants, General Re, GeneralCologne Re and Berkshire Hathaway, to have the cases consolidated into one action at the U. S. District Court for the Western District of Tennessee.
Bermuda-registered Sentinel Insurance Company Ltd., which collapsed in 2001, has "substantial debts" and "virtually no assets whatsoever", according to its provisional liquidator, Jeremy Cox. Cox, who is Bermuda's Registrar of Companies, commented on the indebtedness of Sentinel in a court filing at the U. S. Bankruptcy Court for the Northern District of Georgia on December 1, 2003.
An offshore fund administrator has been accused of "impeding" the investigation in the United States into the $600 million collapse of the Lancer group of hedge funds. Citco Fund Services (U.S.A.) Inc. has refused to turn over records concerning BVI-registered Lancer Offshore Inc. and The OmniFund Ltd., which its Netherlands Antilles affiliate administered.
Several Bermuda-registered companies or their clients have been affected by the failure of a hedge fund group which allegedly defrauded its investors of more than $600 million. Subsidiaries or affiliates of the Bank of Bermuda, Bank of Butterfield, Conyers Dill & Pearman, Lines Overseas Management, and the Meridian Group are on the service list for filings at federal court in Miami.
Three United States-based firms have asked a court to appoint an independent Bankruptcy Trustee for AlphaStar Insurance Group Ltd. to prevent further fraud. The current management of AlphaStar and 11 of its subsidiaries, which all filed for Chapter 11 bankruptcy protection in New York on December 15, 2003, cannot be trusted, it was alleged.
Letter to the Editor of OffshoreAlert from Stephen Crane, CEO of AlphaStar Insurance Group, formerly known as Stirling Cooke.
An arbitration panel sitting in New York has awarded more than $1 billion against failed aviation reinsurance pool manager Fortress Re Inc., of North Carolina. In a decision issued on December 16, 2003, the panel found that Fortress Re and its principals, Maurice Sabbah and Kenneth Kornfeld perpetrated a massive fraud against Sompo Japan Insurance Inc.
Bermuda-domiciled AlphaStar Insurance Group Ltd. and 11 of its subsidiaries have applied for Chapter 11 bankruptcy protection in New York. The group is seeking breathing room while it seeks buyers for its assets, including policy-issuing subsidiary Realm National Insurance Company, for which AlphaStar "is no longer able to provide capital".
A United Kingdom-based accounting firm accused of fraud involving an offshore bank has gone into liquidation and its two partners declared bankrupt. Orders to wind-up Dobb White & Co., of Leicester and Nottingham, in England, and bankrupt Shinder Singh Gangar and Alan White were issued by the UK High Court on December 2, 2003.
An offshore company which collapsed with massive losses amid allegations of fraud is being sued by a purported forex trader who claims he is owed commissions for making it a profit.Igor Toshchakov, of Los Angeles, California, filed a lawsuit against Orion International LLC, of Western Samoa, and its President, Russell B. Cline, at the U. S. District Court for the Central District of California on August 14, 2003.
Deloitte & Touche has offered $32 million to settle a class action lawsuit filed on behalf of shareholders of the British Virgin Islands-registered Manhattan Investment Fund who bought shares between October, 1995 and January, 2000.
Bermuda-based captive First Virginia Reinsurance Ltd. has a deficit of between $79 million and $111 million, according to a ruling at Bermuda Supreme Court.Details of the reinsurer's insolvency were contained in a written judgment on October 23, 2003 by Puisne Judge Ian Kawaley.
Bermuda-based life reinsurer Hampton Re, which was sponsored by JP Morgan, went into liquidation this month after less than three years in business."The reason for winding down the business is two-fold," Mary Sedarat, a spokesperson for J.P. Morgan Private Bank, told The Royal Gazette newspaper, which revealed the firm's closure on October 16.
An offshore hedge fund whose Board includes a director of the agency that regulates it has gone into liquidation. Beacon Hill Master Ltd. filed a voluntary winding-up petition at the Grand Court of the Cayman Islands on October 27, 2003. Theodore Bullmore and Simon Whicker, both of KPMG, have been appointed liquidators.
A syndicate of banks led by JPMorgan Chase Bank is the biggest creditor of ailing Bermuda-based specialty insurer Trenwick Group Ltd., with an outstanding claim of $183 million at August 20, 2003.The syndicate also includes Wachovia Bank, Credit Lyonnais (New York), Dresdner Bank (New York and Grand Cayman), Fleet National Bank, The Royal Bank of Scotland, ING Bank (London), Citibank, The Bank of Nova Scotia, State Street Bank and Trust Company, and Mizuho Corporate Bank.
Lancer Offshore boss Michael Lauer has asked a court to vary an order freezing his assets so that he can meet claimed monthly living expenses of $93,000 and pay for his defense against allegations of fraud.
Two offshore entities have been named as defendants in a lawsuit filed in the United States by the Receiver of the Cash 4 Titles Ponzi Scheme, whose insolvency is more than $150 million.It has been alleged that Private Terms Ltd., c/o Morningstar Holdings Ltd., Nevis; Classic Terms Ltd., of the Cayman Islands; and their alleged owner, Gilbert M. Miller, of Duluth, Georgia, USA, profited by at least $3.2 million from the scheme.