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.... no need to wonder why.
As I said months ago both the PNP and the JLP have questions to answer regarding their parties' receiving the proceeds of alleged & apparent financial crimes..... was the JLP road to power paved by OLINT and other kin???
Trafigura?? Ah wha dat??! LOL!!
Bruce....whey yuh deh?? Step up!!
What fate for Olint associates?
By Al Edwards
Friday, October 09, 2009
With David Smith, the lead principal of Olint, now facing several counts of fraud, the question occupying the minds of those seeking to bring him to book is: who were his associates and to what extent did they benefit from what, for all intents and purposes, has been described as a Ponzi scheme?
SMITH... was again arrested for fraud and uttering false documents
Olint began operating in 2006 and was said to be a foreign-currency trading outfit that could make double-digit returns regularly on a monthly basis. It caught the public's imagination, with thousands of people signing up, including leading government officials, prominent business personages, professionals and a host of other people who spoke of making handsome returns. Smith was hailed as one of the world's top foreign-currency traders and he even offered to trade on behalf of the Jamaican Government as a means of addressing Jamaica's huge debt burden.
After a protracted battle with the Financial Services Commission (FSC), the Supreme Court held that Olint was unregulated and could not operate in Jamaica, resulting in Smith setting up shop in the Turks & Caicos Islands.
In July of last year, Olint announced that it was unable to pay out to its clients who, in fact, had helped to create a "virtual economy" where consumer spending received a hitherto unprecedented boost.
Arrested for Fraud
Once safe under the Michael Misick administration in Turks & Caicos, Smith's offices and home were raided in the Turks & Caicos in July 2008 and funds held by Olint and David Smith and his wife, Tracey in the US were frozen. In February 2009, Smith was again arrested for fraud and uttering false documents. Four months later, he was arrested again while vowing he was innocent and was not operating a Ponzi scheme.
He was successfully able to post bail. Last month, he was again arrested, facing an additional 14 charges and was refused bail on this occasion. His wife, though, was able to post bail.
Many Jamaicans who had money with Olint have been anxious to know whether they will be able to get back, at the very least, a part of their principal. That now seems highly unlikely as Olint's liquidator, John Connolly, has in effect deemed Smith's operation a Ponzi scheme with 6,000 investors netting Olint US$220 million. To date, Connolly has identified around US$14 million in liquid assets, with 376 people claiming some US$67 million.
Connolly has said that it is difficult to ascertain the true state of Olint because Smith has not been forthcoming with the company's accounts and list of investors. He is now going through the courts to do so. Perhaps what is particularly damning is his assessment that Smith did very little trading and that Olint served as a conduit for taking funds from investors to redeem payments due to long-standing clients.
A proliferation of Ponzi schemes
It is unfortunate for Smith that his predicament comes at a time when other failed schemes have been dominating the news. Bernie Madoff's US$50-billion scheme sent shockwaves through Wall Street. Closer to the Caribbean, there is Allen Stanford's US$7- billion Certificates of Deposit operation that has landed him in jail. On a smaller scale is Marc Dreier's US$700-million Ponzi scheme which saw 13 hedge funds lose US$380 million and the Harvard Law graduate sentenced to 20 years' imprisonment.
Then there is the case of Imperial Consolidated which operated in many Caribbean islands, the US and the UK, duping investors out of their savings in a £150-million international fraud that was uncovered by the UK's Serious Fraud Office. The investment group promised returns as high as 36 per cent per annum.
London's Blackfriars Crown Court was told that long-standing investors were repaid "by utilising investor funds" rather than from the profits of businesses owned by the group. All these cases come against the background of one of the biggest financial crises since the Great Depression of the 1930s. Perpetrators of Ponzi schemes are incurring the ire of people the world over, and the sentences handed down have been severe, which does not bode well for Smith.
Connolly concludes: "The pattern of receipts and payments indicate that the main function of the Hallmark/Olint account was to collect money from members (US$220 million) and then meet redemption requests from members (US$156 million). We can find no evidence in our analysis of the source and application of funds of any trading profits being received in the bank account to meet these redemption requests."
But Smith was not acting alone. It's well-known that other people, claiming to be associated with Olint, enticed a number of investors. An organisation that reaps hundreds of millions of US dollars and where people benefited handsomely may well be held culpable and accountable. In the United States, the question now posed by both prosecutors and regulators of Bernie Madoff's scheme is whether his sons Andrew and Mark - both of whom had spent their entire careers working with and for their father - were both in on one of the biggest Ponzi schemes in corporate history.
Nearer home, everyone is wondering what happens now to those who worked closely with Smith, making oodles of cash, and what exactly did they know about his practices. There are those who now maintain that they believed that he was a more-than-able foreign currency trader and that they made the most of an opportunity. But is this enough to absolve them? Many of the super agents have moved on to other pursuits such as putting on paid parties. But how does the law view them?
Speaking with Caribbean Business Report earlier this week, Deputy Superintendent Rowe of the Anti-Corruption Branch of the Jamaica Constabulary Force said: "The first thing that has to be established is whether a criminal offence has been committed, and in most cases is it triable in both countries.
To bring accomplices to book will require that the Turks & Caicos Islands has signed an extradition treaty with Jamaica. In this case the relevant authorities will write to the Ministry of Foreign Affairs outlining the case and the reason for the request, and the ministry in turn will pass the matter on to the attorney-general or the Ministry of Justice. This kind of case, and for that matter, extradition matters are treated differently in different jurisdictions.
"As far as the Smith case is concerned, before extradition orders are requested it will have to be determined what was the exact nature of the role played by these accomplices? Did they have knowledge of his practices and, knowing what he was doing, did they continue to benefit from those practices."
Last year, a letter was circulated by an associate imploring Smith to be transparent with his activities, and the party concerned disassociated himself from Smith and Olint, outlining the reasons for doing so. This missive was unequivocal in its intent and may prove to be a saving grace.
Superintendent Fitz Bailey, who heads the Organised Crime Investigative Division, pointed out that it would be difficult to talk on extradition matters concerning the Smith case because it is a matter for the Turks & Caicos authorities, and Jamaican law has no application there. However, if a parallel investigation was conducted that would be a different matter altogether.
William Mather of the UK's Serious Fraud Office, which is now investigating Bernie Madoff's UK activities, speaking from London, said: "We are aware of the Smith case and I am sure we will lend our assistance to the authorities of the Turks & Caicos authorities if they should request it. As far as I am aware, this is a protracted investigation with a number of arrests, with Smith yet to be convicted. I think this is due to there being a lack of substantive information on Olint's activities.
"The Jamaican authorities have not conducted an investigation and are not pressing charges which, I think, makes it difficult to extradite accomplices. Mind you, that's my personal opinion and I do not speak here on behalf of the Serious Fraud Office. The way I see it, a thorough investigation would entail a joint effort by Jamaican, UK, US and TCI law enforcement agents. I sense that the Jamaican Government is not too enamoured of the idea of pressing to bring Smith down. Like you, I hear that many government operatives are embroiled in Olint, as are members of prominent families of Jamaica. We will have to just wait and see."
Earlier this week, the court-appointed liquidator of alternative investment scheme Cash Plus, Hugh Wildman, announced that he has discovered US$25 million in a bank account belonging to former Cash Plus boss Carlos Hill in Dubai. This has raised the hopes of investors in Cash Plus of retrieving some money while at the same time resulting in a surge of claims on Cash Plus.
Meanwhile, of the 6,000 investors in Olint, fewer than 400 have come forward with official claims, and the liquidator has talked of a reluctance by investors to come forward and submit relevant information. This in itself has hampered progress in the case.
Head of the investigations, Mark Knighten of the Royal Turks & Caicos Islands Police Force's Financial Crimes Unit, said: "In view of the fact that there are various jurisdictions involved and the amount of documents to examine, we are still in a process, and we cannot progress really until we have got the full picture. Of course, when we have got the full picture, then we would decide on the further course of action."
Nice work by the Scandals Newsletter.
Al Edwards seems to have taken a break from his PR cum Hatchet Job activities for Butch.
Way to go Al!!
As I said months ago both the PNP and the JLP have questions to answer regarding their parties' receiving the proceeds of alleged & apparent financial crimes..... was the JLP road to power paved by OLINT and other kin???
Trafigura?? Ah wha dat??! LOL!!
Bruce....whey yuh deh?? Step up!!
What fate for Olint associates?
By Al Edwards
Friday, October 09, 2009
With David Smith, the lead principal of Olint, now facing several counts of fraud, the question occupying the minds of those seeking to bring him to book is: who were his associates and to what extent did they benefit from what, for all intents and purposes, has been described as a Ponzi scheme?
SMITH... was again arrested for fraud and uttering false documentsOlint began operating in 2006 and was said to be a foreign-currency trading outfit that could make double-digit returns regularly on a monthly basis. It caught the public's imagination, with thousands of people signing up, including leading government officials, prominent business personages, professionals and a host of other people who spoke of making handsome returns. Smith was hailed as one of the world's top foreign-currency traders and he even offered to trade on behalf of the Jamaican Government as a means of addressing Jamaica's huge debt burden.
After a protracted battle with the Financial Services Commission (FSC), the Supreme Court held that Olint was unregulated and could not operate in Jamaica, resulting in Smith setting up shop in the Turks & Caicos Islands.
In July of last year, Olint announced that it was unable to pay out to its clients who, in fact, had helped to create a "virtual economy" where consumer spending received a hitherto unprecedented boost.
Arrested for Fraud
Once safe under the Michael Misick administration in Turks & Caicos, Smith's offices and home were raided in the Turks & Caicos in July 2008 and funds held by Olint and David Smith and his wife, Tracey in the US were frozen. In February 2009, Smith was again arrested for fraud and uttering false documents. Four months later, he was arrested again while vowing he was innocent and was not operating a Ponzi scheme.
He was successfully able to post bail. Last month, he was again arrested, facing an additional 14 charges and was refused bail on this occasion. His wife, though, was able to post bail.
Many Jamaicans who had money with Olint have been anxious to know whether they will be able to get back, at the very least, a part of their principal. That now seems highly unlikely as Olint's liquidator, John Connolly, has in effect deemed Smith's operation a Ponzi scheme with 6,000 investors netting Olint US$220 million. To date, Connolly has identified around US$14 million in liquid assets, with 376 people claiming some US$67 million.
Connolly has said that it is difficult to ascertain the true state of Olint because Smith has not been forthcoming with the company's accounts and list of investors. He is now going through the courts to do so. Perhaps what is particularly damning is his assessment that Smith did very little trading and that Olint served as a conduit for taking funds from investors to redeem payments due to long-standing clients.
A proliferation of Ponzi schemes
It is unfortunate for Smith that his predicament comes at a time when other failed schemes have been dominating the news. Bernie Madoff's US$50-billion scheme sent shockwaves through Wall Street. Closer to the Caribbean, there is Allen Stanford's US$7- billion Certificates of Deposit operation that has landed him in jail. On a smaller scale is Marc Dreier's US$700-million Ponzi scheme which saw 13 hedge funds lose US$380 million and the Harvard Law graduate sentenced to 20 years' imprisonment.
Then there is the case of Imperial Consolidated which operated in many Caribbean islands, the US and the UK, duping investors out of their savings in a £150-million international fraud that was uncovered by the UK's Serious Fraud Office. The investment group promised returns as high as 36 per cent per annum.
London's Blackfriars Crown Court was told that long-standing investors were repaid "by utilising investor funds" rather than from the profits of businesses owned by the group. All these cases come against the background of one of the biggest financial crises since the Great Depression of the 1930s. Perpetrators of Ponzi schemes are incurring the ire of people the world over, and the sentences handed down have been severe, which does not bode well for Smith.
Connolly concludes: "The pattern of receipts and payments indicate that the main function of the Hallmark/Olint account was to collect money from members (US$220 million) and then meet redemption requests from members (US$156 million). We can find no evidence in our analysis of the source and application of funds of any trading profits being received in the bank account to meet these redemption requests."
But Smith was not acting alone. It's well-known that other people, claiming to be associated with Olint, enticed a number of investors. An organisation that reaps hundreds of millions of US dollars and where people benefited handsomely may well be held culpable and accountable. In the United States, the question now posed by both prosecutors and regulators of Bernie Madoff's scheme is whether his sons Andrew and Mark - both of whom had spent their entire careers working with and for their father - were both in on one of the biggest Ponzi schemes in corporate history.
Nearer home, everyone is wondering what happens now to those who worked closely with Smith, making oodles of cash, and what exactly did they know about his practices. There are those who now maintain that they believed that he was a more-than-able foreign currency trader and that they made the most of an opportunity. But is this enough to absolve them? Many of the super agents have moved on to other pursuits such as putting on paid parties. But how does the law view them?
Speaking with Caribbean Business Report earlier this week, Deputy Superintendent Rowe of the Anti-Corruption Branch of the Jamaica Constabulary Force said: "The first thing that has to be established is whether a criminal offence has been committed, and in most cases is it triable in both countries.
To bring accomplices to book will require that the Turks & Caicos Islands has signed an extradition treaty with Jamaica. In this case the relevant authorities will write to the Ministry of Foreign Affairs outlining the case and the reason for the request, and the ministry in turn will pass the matter on to the attorney-general or the Ministry of Justice. This kind of case, and for that matter, extradition matters are treated differently in different jurisdictions.
"As far as the Smith case is concerned, before extradition orders are requested it will have to be determined what was the exact nature of the role played by these accomplices? Did they have knowledge of his practices and, knowing what he was doing, did they continue to benefit from those practices."
Last year, a letter was circulated by an associate imploring Smith to be transparent with his activities, and the party concerned disassociated himself from Smith and Olint, outlining the reasons for doing so. This missive was unequivocal in its intent and may prove to be a saving grace.
Superintendent Fitz Bailey, who heads the Organised Crime Investigative Division, pointed out that it would be difficult to talk on extradition matters concerning the Smith case because it is a matter for the Turks & Caicos authorities, and Jamaican law has no application there. However, if a parallel investigation was conducted that would be a different matter altogether.
William Mather of the UK's Serious Fraud Office, which is now investigating Bernie Madoff's UK activities, speaking from London, said: "We are aware of the Smith case and I am sure we will lend our assistance to the authorities of the Turks & Caicos authorities if they should request it. As far as I am aware, this is a protracted investigation with a number of arrests, with Smith yet to be convicted. I think this is due to there being a lack of substantive information on Olint's activities.
"The Jamaican authorities have not conducted an investigation and are not pressing charges which, I think, makes it difficult to extradite accomplices. Mind you, that's my personal opinion and I do not speak here on behalf of the Serious Fraud Office. The way I see it, a thorough investigation would entail a joint effort by Jamaican, UK, US and TCI law enforcement agents. I sense that the Jamaican Government is not too enamoured of the idea of pressing to bring Smith down. Like you, I hear that many government operatives are embroiled in Olint, as are members of prominent families of Jamaica. We will have to just wait and see."
Earlier this week, the court-appointed liquidator of alternative investment scheme Cash Plus, Hugh Wildman, announced that he has discovered US$25 million in a bank account belonging to former Cash Plus boss Carlos Hill in Dubai. This has raised the hopes of investors in Cash Plus of retrieving some money while at the same time resulting in a surge of claims on Cash Plus.
Meanwhile, of the 6,000 investors in Olint, fewer than 400 have come forward with official claims, and the liquidator has talked of a reluctance by investors to come forward and submit relevant information. This in itself has hampered progress in the case.
Head of the investigations, Mark Knighten of the Royal Turks & Caicos Islands Police Force's Financial Crimes Unit, said: "In view of the fact that there are various jurisdictions involved and the amount of documents to examine, we are still in a process, and we cannot progress really until we have got the full picture. Of course, when we have got the full picture, then we would decide on the further course of action."
Nice work by the Scandals Newsletter.
Al Edwards seems to have taken a break from his PR cum Hatchet Job activities for Butch.Way to go Al!!
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