All content of David Marchant

Offshore Territories must enforce ‘all-crimes’ laws, not just pass them into law

June 28, 1998

Offshore financial centres that are also UK Overseas Territories have been told that it is not enough for them simply to introduce legislation outlawing ‘all-crimes' but that they must also enforce the new laws.That was one of the messages delivered to the House of Commons Select Committee on Public Accounts by Sir John Kerr, Permanent Under-Secretary of State for the UK government.

Bahamas News Briefs

May 31, 1998

Mutual Fund stats; Central Bank suspends Socimer International Bank; and National Debt grows.

Bermuda Insurance Market Ownership Review: 21 officers worth over $10 million

May 31, 1998

RenaissanceRe president and CEO James Stanard has topped a survey valuing the shareholdings held by the top officers of Bermuda-registered publicly-listed insurers in their own companies, with a stake valued at $48.7 million on March 16, 1998.

First Nevisian defends itself in erroneous press release

May 31, 1998

A press release claiming it is the victims of a 'smear campaign' briefly appeared on the web-site (www.firstnev.com) of the First Nevisian stockbroking and corporate services group recently before quickly being taken off. The release was in response to our article of March 31 that revealed the existence of an arrest warrant for First Nevisian's boss, Keith King, in South Africa, where he is wanted for questioning in relation to fraud and forgery offences, that his Isle of Man company had lost a recent lawsuit brought by a former client and that King had been declared to be ‘not a fit and proper' person to run a company in the Isle of Man.

Insider Talking: May 31, 1998

May 31, 1998

Former Cayman banker John Mathewson's sentencing hearing for helping to launder the proceeds of crime has been delayed yet again. Mathewson was due to be sentenced on April 30 by a court in New Jersey in the US but the matter was adjourned until later in the year; If figures compiled by The Wall Street Journal are to be relied upon for accuracy, the Cayman Islands is not the world's fifth largest financial center, as it claims, but is actually the eighth largest; Six months after US$9 million of its assets were frozen in British Columbia as part of an investigation into fraudulent trading, the Cayman-based broker/dealer Harris McLean Financial Group has filed a lawsuit in the Grand Court of the Cayman Islands against one of its principals, Richard Harris, and his mother, Ana Harris; and Those of you who have been following our articles on The Harris Organization of Panama might like to read a three-page article on the subject that appeared in the June 1 edition of Business Week.

Scandal-plagued Cayman government faces new crisis over John McLean

May 31, 1998

The Cayman Islands government is facing its second scandal within seven months following an announcement that Minister of Land John McLean has been cleared of illegally obtaining Crown Land worth tens of millions of dollars - despite evidence to the contrary. The circumstances of the official whitewash of McLean are such that it calls into question the ability of the current government to administer its affairs in a competent or moral manner, including regulating its offshore financial services sector.

Stirling Cooke – profit up but what lies around the corner?

May 31, 1998

Stirling Cooke Brown Holdings, a publicly-listed company over which there are several question marks, has reported a profit of $4 million for the three months ended March 31, 1998 - a 41 per cent increase on the same period a year earlier. The company reported that revenues went up by 39 per cent to $19.9 million, while reporting that expenses also increased by 39 per cent to $15 million.

The colourful world of the promoters of The Harris Organization

May 31, 1998

One wrote a book describing Albania as a "fairy tale land" and promised he could show investors "how to double your capital at no risk", another sells seemingly dodgy insurance brokerage licences to the gullible, promising they are available within 72 hours to people with no qualifications or even a formal education who will be able to access the Lloyd's of London market; and another has written a book on prostitution showing where "balding, fat guys like your author" can find "Thai virgins".

First Cayman Bank liquidators prepare to sue directors

May 31, 1998

The liquidators of First Cayman Bank have opened negotiations with the bank's directors and officers with a view to holding them financially accountable for their responsibilities. A lawsuit for negligence is also being considered against the bank's auditors. This and the fact that professional fees and disbursements totalling $1.16 million were incurred in the first 23 weeks of provisional or official liquidation were the highlights of the second report of FCB's liquidators, Ian Wight and Michael Pilling, of Deloitte & Touche, dated May 14.

Turks & Caicos firm used for alleged fraud

April 30, 1998

The U. S. Securities and Exchange Commission has obtained a preliminary injunction and other relief against an Austrian national and three of his companies, including one in the Turks & Caicos Islands, in connection with an alleged multi-million fraud targeted primarily at German-speaking Europeans.

Nevis government supports First Nevisian boss despite arrest warrant

April 30, 1998

The Nevis government has thrown its support behind the First Nevisian stockbroking and corporate services group after Offshore Alert revealed last month that there is a current arrest warrant in South Africa for its main principal, Keith Leslie King, in relation to fraud and forgery charges and that he was kicked out of the Isle of Man by regulators. We have not heard from King or the Nevis government since we ran our article last month.

The Harris Organization: a $30 million lawsuit, more fraudulent banks and an airplane

April 30, 1998

Offshore Alert's exposé on The Harris Organization last month has caused quite a stir, with journalists from several international media organizations showing an interest in following up the story.

Stirling Cooke accountant Brian Hynes has conviction for fraud

April 30, 1998

An accountant who participated in one of the world's best-known insurance frauds is currently working for Bermuda-based insurance group Stirling Cooke Brown Holdings as a financial accountant, we can disclose. Brian J. Hynes, former managing director of Carlos Miro-owned Anglo-American International Reinsurance Co., is employed by Stirling Cooke at its London office.

US government brings test case against offshore gaming operators

April 30, 1998

In what is being seen as a test case, the U. S. Government has charged 14 owners and managers of six sports betting companies headquartered in the Caribbean and Central America with conspiracy to transmit bets and wagers on sporting events via the Internet and telephones. The cases are the first federal prosecutions of sports betting over the Internet and they will be watched closely by offshore centers that have embraced gambling as a way of earning much-needed foreign currency.

Dumb and Dumber: How not to conduct a private investigation

April 30, 1998

Prior to, and following, the publication of last month's edition of Offshore Alert, private investigators have been making an unsuccessful attempt to dig up dirt on its publisher and founder, David Marchant. So hapless has the investigation been that Marchant was actually able to track down one of the investigators - Darren Brost, of Renton, Washington - and gave him a call to say ‘hello' and to inform him that he faced the possibility of prosecution for suspected fraud. A criminal complaint against the man has been made with police in his home-town of Renton, Washington State, alleging that he obtained telephone records by wire fraud.

FCO letter presents gloomy picture for offshore finance centres

April 30, 1998

Further details obtained by Offshore Alert about the UK government's new proposals for regulations in its Overseas Territories confirm that what is being planned represents an offshore financial centre's worst nightmare. And there is growing evidence that independent offshore centres like the Bahamas and Antigua are also facing international pressure to conform to new standards.

Al Thani lawsuit is not related to First Cayman Bank

April 30, 1998

Eyebrows were raised in Cayman this month when a lawsuit was filed at the Grand Court by Khalifa bin Hamad Al Thani against Strand Overseas Investment Limited. The Al Thani family, you may recall, owns Gulf Union Bank and its subsidiaries, First Cayman Bank and Gulf Union (Bahamas).

Arrest warrant out for First Nevisian principal Keith King

March 31, 1998

Readers who are considering doing business with the First Nevisian stock-broking and corporate services group in Nevis might like to know there is a warrant out in South Africa for the arrest of its key principal, Keith Leslie King. They may also be interested to learn that he set up a firm in Nevis after being kicked out of the Isle of Man, where his company, City & International Securities, also recently lost a £45,000 ($72,000) lawsuit brought by a former client. A second lawsuit against City & International Securities and King personally is due to be tried soon in the Isle of Man.

Evidence of insider trading in Mid Ocean shares prior to take-over

March 31, 1998

Investors apparently acting on inside knowledge made a killing in the derivatives market on the last day of trading before it was announced that EXEL was buying Mid Ocean, we can reveal. The volume of contracts traded in Mid Ocean call options on the American Stock Exchange increased from an average daily volume of 30 contracts to 950 contracts on Friday, March 13 - two days before the deal was signed and three days before it was announced.

Mystery over Clarendon’s dubious producer

March 31, 1998

Anyone doing business with the Clarendon Insurance Group should take a close look at further evidence we have obtained which clearly shows that either a senior officer of the group is lying about its relationship with a dubious business producer or the producer is submitting fraudulent documents to the London insurance market. Either way, the Clarendon officer who may have lied to us, Thomas Corteville, vice president/financial operations of Clarendon National Insurance Company, seemed more concerned with attacking this newsletter than analyzing the facts.

Cayman government back pedals on John McLean land investigation

March 31, 1998

Following pressure from Offshore Alert, the Cayman government has done a U-turn and launched a fresh investigation into the suspicious circumstances in which Minister of Land John McLean came into possession of Crown Land worth tens of millions of dollars. In a letter dated March 17, Attorney General Richard Coles, acting on behalf of the Governor, John Owen, wrote to us stating that McLean "is concerned that the matter should be clarified as soon as possible".

‘The Harris Matrix’ for hiding money from the IRS and your wife

March 31, 1998

Offshore Alert has obtained confidential documents that are presented to clients of The Harris Organization advising them how to hide their assets from their creditors, be it the IRS or their wives if they are going through a divorce. The documents are so sensitive that the cover sheet states: "Under no circumstances may this document be utilized outside the offices of The Harris Organization. Misuse or disclosure of this document is subject to civil and criminal sanctions under Panamanian law."

BCCI liquidator wins High Court judgment

March 31, 1998

The liquidator of the Bank of Credit & Commerce International has won a High Court judgment in London for £17 million ($28 million) against former employees and relatives of a loans officer at the bank, which was closed in 1991. Two million pounds of the total, representing the value of four residential properties and a unit on an industrial estate in London, will be available immediately to the liquidator, Deloitte & Touche, reported the Financial Times newspaper.

MRM’s millionaire insurance bosses

March 31, 1998

Mutual Risk Management chairman and CEO Robert Mulderig received a financial package worth $2.67 million for fiscal 1997, according to the company's latest Proxy Statement filing with the SEC. Mulderig received a salary of $452,250, a bonus of $486,842, pension contributions of $11,309 and a profit of $1.72 million from exercising stock options. His right-hand man, John Kessock, who is president of the company, received a package valued at $2.64 million, comprising a salary of $452,504, a bonus of $486,842, pension contributions of $4,000 and a stock option profit of $1.7 million.

Gulf Union (Bahamas) finally goes into permanent liquidation

March 31, 1998

After a hearing that lasted half a day, the Bahamas Supreme Court officially placed Gulf Union Bank (Bahamas) into liquidation on March 26 but deferred a decision on whether to appoint the current provisional liquidators as permanent liquidators. The court first ruled on two preliminary legal issues regarding the competence and appropriateness of the National Insurance Board, which is a government agency, in being allowed to petition for the winding-up of the bank.

Swiss American seeks dismissal of US lawsuit

March 31, 1998

Swiss American Bank Limited and Swiss American National Bank of Antigua filed on March 16 a motion to dismiss a complaint filed against them in Massachusetts by the US government alleging theft of $7 million of drugs money.

Insider Talking: March 31, 1998

March 31, 1998

John Deuss courts PLP political party in Bermuda, offshore regulators John Lawrence and Marcus Killick find new jobs, proposed purchase of Little Switzerland by Colombian Emeralds International may have implications for Crisson's, Leigh Bruce Ritch is apparently now living in Cayman under the name Bruce Ritchie after completing a prison-term in the USA for narcotics-trafficking, Rex Crighton receives 'in principle' planning approval to dredge Cayman's North Sound, Grenada appoints Viktor Kozeny as its Honorary Consul in the Bahamas, investors make approximatly $1 million on call options bought one day before announcement of sale of Bermuda reinsurer Mid Ocean Ltd.

The Harris Organization’s multi-million dollar Ponzi scheme

March 31, 1998

Offshore Alert can today disclose that Panama's most-hyped financial services group, known as The Harris Organization, is being run as a massive Ponzi scheme in which clients are being defrauded out of millions of dollars. The situation is so serious that The Harris Organization, which employs 150 people in Panama, is hopelessly insolvent, with net liabilities of at least $25 million, according to sources knowledgeable of the group's financial affairs.

Marc Harris says: ‘We’re cleaner than clean.’

March 31, 1998

David Marchant, the publisher of Offshore Alert, flew to the Bahamas on Wednesday, March 25 to meet with Marc Harris at the Radisson Grand Hotel in Cable Beach, near Nassau. Also present at the meeting were Larry Gandolfi, who is a salesman; Christopher Davy, head of computers; and Alan McAloon, head of trust services.

Mid Ocean’s Michael Butt receives $7 million package for fiscal 1997

February 27, 1998

Michael Butt, the 55-year-old president and CEO of Bermuda-based reinsurer Mid Ocean Limited, received a financial package worth $7 million in fiscal 1997, according to the company's latest Proxy Statement filing with the SEC.Butt's remuneration comprised $485,000 in salary, $500,000 as a performance bonus, $209,800 in travel and housing allowances, $53,100 in contributions to his pension plan, a profit of $5.31 million from share options he exercised during the year and a further $417,600 in restricted stock awards that were granted in previous years but which vested during fiscal 1997.

Battle to stop Bahamas government controlling liquidation of Gulf Union Bank

February 27, 1998

A fierce battle has been taking place behind closed doors in the Bahamas over the last month to prevent the government from controlling the winding-up of Gulf Union Bank (Bahamas) Limited.Depositors are concerned that a government-controlled liquidation will lead to a whitewash of the regulatory role in the bank's collapse of the Central Bank of the Bahamas.

Breakdown of depositors’ funds at First Cayman Bank

February 27, 1998

The latest news from the liquidators of First Cayman Bank is that there were 3,606 depositors with total deposits of $27.3 million.Of the total deposits, US$24.9 million, or 91 per cent, was placed by only 343, or 9.5 per cent, of depositors, each of whom had a net deposit of over US$10,000.

FCO announces end of bank secrecy in overseas territories

February 27, 1998

The clearest indication yet that the UK government will force its Overseas Territories to co-operate with foreign regulators investigating both fiscal and regulatory offences was given this week to Offshore Alert.Offshore centres like Bermuda, the Cayman Islands, the Turks & Caicos Islands and the British Virgin Islands are being told by the UK government to introduce within two years legislation that will be virtually identical to the UK Criminal Justice (International Co-operation) Act 1990.

EMLICO battle goes to Privy Council

February 27, 1998

The complicated legal battle over whether General Electric-subsidiary Electric Mutual Liability Insurance Company Limited should be liquidated in Massachusetts or Bermuda is scheduled to be heard by the Privy Council in London - the highest court in Bermuda's judicial system - next month.In an added twist to a drama whose circumstances change on a regular basis, Kemper Re brought, on February 20, its second lawsuit at Bermuda Supreme Court challenging the decision to allow EMLICO to redomicile to Bermuda.

John Deuss forms Bermuda rent-a-captive

February 27, 1998

One of the better kept secrets in Bermuda over the last few years has been the entry into the insurance market of Bermuda-based Dutch oil billionaire John Deuss.Not one for publicizing his business interests, Deuss quietly formed Transglobal Insurance (Holdings) Limited and its operating subsidiary, Transglobal Insurance Limited, in Bermuda on February 22, 1996.

Bermuda property dealer gives evidence at Jersey fraud trial

February 27, 1998

Bermuda-based property dealer Bryan Gudgeon flew to Jersey this month to give evidence in the trial of Robert Young, who is accused of making false, misleading or deceptive statements that helped him make $6 million while he was losing his clients more than $10 million in five years.Gudgeon was Young's largest single investor, putting $10 million into his foreign exchange schemes. He was one of the few investors to emerge with a profit.

Bruce Rappaport appointed Antigua’s Ambassador to Russia

February 27, 1998

Readers who followed last month's story about the US government's lawsuit accusing four banks and the Antiguan government of illegally divvying up $7 million in drug profits might be interested to know that Antigua recently appointed the banks' owner, Bruce Rappaport, as its Ambassador to Russia.The appointment of Rappaport to this official position on December 3, 1997, adds an interesting twist to the recent lawsuit brought by the US government against the Antigua-based Swiss American Bank group and Inter-Maritime Bank, of Geneva.

Deloitte & Touche clear way for $3 billion claim against Ernst & Young

February 27, 1998

A $3 billion claim brought by Deloitte & Touche as liquidators of the failed Bank of Credit & Commerce International against accounting firm Ernst & Young was reinstated by the Court of Appeal in London on February 13. The ruling overturned a High Court decision of January of last year.

Record land deal signed in Turks & Caicos Islands

February 27, 1998

The largest land development agreement to be signed in the history of the Turks & Caicos Islands calls for the construction of a harbour and duty free zone in the southern end of Grand Turk that is estimated to cost $312 million in a four phased development plan, reported the Turks & Caicos Free Press.The agreement was signed in December by the government and Grand Turk Harbour Development Company Limited, which is registered in TCI. The first phase of the plan is scheduled to begin early this year.

Turks & Caicos Islands Legislative Council meeting ends in farce and acrimony

February 27, 1998

If there's nothing decent on television, residents of the Turks & Caicos Islands can always go and sit in on the local Legislative Council for their fix of high drama and farce.One of the better episodes of LegCo, as the elected body is known, came during a debate on The Companies (Amendment) Bill on December 4, 1997.

Comp Indemnity Re granted Cayman insurance license

February 27, 1998

Two subsidiaries of Bermuda-based reinsurers were recently granted licences to operate in the Cayman Islands. Stockton Reinsurance (Cayman) Limited, which was incorporated on July 29, 1997, received a restricted Class B licence, which allows the licensee to cover only the risks of its parent company.

Pressure mounts on John McLean to explain Cayman land deal

February 27, 1998

Pressure was mounting this month on Cayman Minister of Land John McLean to publicly explain how he came into possession of 200 acres of Crown Land with a potential quarrying value of tens of millions of dollars.Cayman Governor John Owen has been asked to investigate the matter and it was raised yesterday on the floor of the Legislative Assembly by Frank McField, who was ruled out of order by the Speaker. McLean, who has not attended recent Legislative Assembly hearings, was not in attendance.

Banker John Rea wins Privy Council ruling on illegal police searches in Cayman

February 27, 1998

The Privy Council in London has rejected an appeal by Detective Inspector Brian Gibbs, the Commissioner of the Royal Cayman Islands Police and the Attorney General against a damages award of US$770,000 made in favour of former bank manager John Rea for an illegal search of his home and his office in 1991.The ruling on January 29, 1998 brings to an end a long, embarrassing and costly saga for the Cayman authorities in which they were found to have maliciously obtained and executed two search warrants against Rea in October, 1991.

Insider Talking: February 27, 1998

February 27, 1998

Buyers of luxury property in Bermuda in 1997 include John Deuss, Reg Grundy, Britons Michael Butt, David Brown, and Ernest Stempel, First Cayman Bank liquidators defend size of fees, Ken Dart turned down for permanent residency in Cayman Islands, John Tugwell wanted to be Bank of Butterfield's Chairman, as well as CEO, say sources; Bermuda Sun newspaper to start publishing twice a week, Thomas Azzara's 'Tax Havens of the World' book contains several inaccuracies, nearly half of all births in Bermuda in 1996 were out of wedlock.

UK Foreign Minister announces plans to reform offshore regulations

February 4, 1998

UK Dependent Territories that are also offshore financial centres have until 1999 to comply with a "check-list" of four key areas of financial regulations to improve standards, UK Foreign Minister Robin Cook announced in London today.

Mark Hardy applies for bankruptcy discharge

January 30, 1998

Businessman Mark Hardy, who ran the Bermuda-based Focus/Forum group of insurance companies that went bust in 1990, is seeking to be discharged as a bankrupt in his native United Kingdom.

BVI to stage due diligence conference

January 30, 1998

The British Virgin Islands has announced that its inaugural Due Diligence and Compliance conference entitled ‘Preserving the Integrity of International Business' will be held on March 9-11.The conference, which is being sponsored by the BVI government in conjunction with the financial services sector, is designed to provide industry participants with in-depth information on recent developments in the cross-border fight against ‘white-collar' crime.

US government sues Swiss American Bank-Inter-Maritime Bank group

January 30, 1998

The US government has filed a landmark civil lawsuit against banks in Antigua, Panama and Switzerland in an attempt to recover $7 million that it claims are the proceeds of criminal activity.The lawsuit is considered to be of significance to other offshore tax havens because it will test the ability of the US government to enforce home-based judgements in foreign territories against offshore companies who collaborate with money launderers.The US government is suing Swiss American Bank Ltd. and Swiss American National Bank Ltd., which are both registered in Antigua; Swiss American Holding Company S. A. of Panama and Inter-Maritime Bank of Geneva.

Mutual Risk Management is best-performing Bermuda insurance stock, Mid Ocean is worst

January 30, 1998

Mutual Risk Management, which derives almost all of its income from fees and retains little or no risk, had the best performing shares of any Bermuda-based, publicly-listed insurer for the last eleven months of 1997.

Bahamas firms part of prime bank securities scam

January 30, 1998

Bahamas-based Loomis Ltd. has been ordered to pay $874,515 following a default judgement against it in the US District Court for the Southern District of New York.Loomis and other companies, including fellow Bahamas-registered Comcar International Ltd., fraudulently obtained more than $2.1 million through a scheme involving fictitious ‘prime bank' securities.