PORTLAND, Oregon, March 30, 2007 – There has been a breakthrough in a multi-million dollar fraud scheme involving a Grenadian bank when the last two accused pled guilty in an investigation that spanned eight years, the FBI announced yesterday.
The investigation involved the first successful use of the Mutual Legal Assistance Treaty between the United States and Grenada to obtain records of the bank’s operations in Grenada.
“This prosecution proves our determination to track down and prosecute those who defraud Oregonians and others out of their savings and pension funds, no matter where they are operating from. I am particularly grateful for the persistence and dedication shown by our law enforcement partners, the Internal Revenue Service Criminal Investigation Division, and the FBI, during this long and demanding investigation,” US Attorney for the District of Oregon, Karin J. Immergut, said in a news release yesterday.
Laurent Barnabe, 68, a Canadian citizen and current resident of Lake Oswego, Oregon, pled guilty Wednesday to two counts of Money Laundering in connection with his role in promoting a fraudulent investment scheme in the name of the First International Bank of Grenada (FIBG). Last week Monday, Douglas Ferguson, 74, and currently a resident of Portland, Oregon, pled guilty to a money laundering conspiracy charge also arising out of his role in promoting FIBG.
Ferguson and Barnabe, along with three others, were charged in October, 2003, in a 147 count indictment with conspiracy, fraud, and money laundering charges arising out of the creation and promotion of the First International Bank of Grenada. Two others defendants in that indictment, Rita L. Regale and Robert J. Skirving, pled guilty last summer, and the fifth, Gilbert Allen Ziegler, a.k.a. Van Arthur Brink, died awaiting trial. Brink was the Founding Chairman and CEO and when the group went into liquidation in January 2001 he fled to Uganda where he was arrested in a shoot-out in which one of his bodyguards was killed.
Established in 1997, FIBG offered interest rates to depositors as high as 300 per cent. It claimed to have earned more than US$12 billion in high yield trading, and to have acquired assets in excess of US$26 billion.
The FBI said it was just a Ponzi Scheme. A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns (“profits”) to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business, named after Charles Ponzi who became notorious for using the technique after emigrating from Italy to the United States in 1903.
The scheme attracted deposits of approximately US$170 million which it used to make phony “interest” payments to depositors, invest in phony high-yield investment schemes, and pay significant sums to the defendants. Much of the money was obtained by persuading victims to roll-over pension and IRA money into FIBG.
When FIBG was taken over by the Grenadian government in August 2000, it had less than US$2 million in real assets. Several Oregon depositors lost significant sums of money. The prosecution was undertaken in Oregon because almost US$50 million raised during the scheme was funneled through a bank account in Forest Grove, Oregon.