26 C
Willemstad
• donderdag 22 april 2021 06:42

ParadiseFM | Luigi Faneyte verlaat Kumun

Luigi Faneyte heeft vandaag laten weten dat hij is opgestapt als voorman van de partij Kumun. Hij bedankt alle 1595 mensen die op 19 maart op Kumun hebben...

ParadiseFM | ‘Vaxications’ nieuwe trend

Niet alleen Curaçao, maar ook veel andere eilanden zijn aan het nadenken over een manier om het toerisme weer op gang te krijgen zodra het vaccinatiedoel bereikt...

DH | Court rules against Alegria, denies long-lease and water rights

PHILIPSBURG--The Administrative Court on Monday came to a different conclusion than the Court of First Instance in September 2020, ruling in favour of Country St. Maarten in...

Ingezonden | Hartverscheurend!

Uw ingezonden brief in de Knipselkrant Curacao? Stuur uw brief voor 21:00 uur naar emailadres INGEZONDEN. Wij publiceren uw brief zonder deze in te korten. De redactie...

AntilliaansDagblad | Verlenging avondklok op Bonaire

Den Haag - De naleving van de avondklok is op Bonaire goed. Bovendien blijkt de maatregel een effectief middel tegen verspreiding van het coronavirus. Daarom krijgt gezaghebber...

AntilliaansDagblad | Ziekenhuis Aruba bereikt grens capaciteit

Oranjestad - Het Hospital Horacio Oduber begint aan de grenzen van zijn capaciteit te komen. ,,De druk is bij ons erg hoog”, vertelde directeur Jacco Vroegop aan...
- Advertisement -spot_img
HomeMediaAlgemeen nieuwsDOJ | Managing partner of investment advisory firmplead guilty to defrauding clients...

DOJ | Managing partner of investment advisory firmplead guilty to defrauding clients and investors in over $100 million Ponzi-like fraud scheme

Department of Justice, U.S. Attorney’s Office

Malta International Investment Group (IIG) owners and Curacao Girobank supervisory boardmembers David Hu and Martin Silver plead guilty to defrauding clients and investors in over $100 million Ponzi-like fraud scheme | Jaarverslag girobank 2012

Audrey Strauss, United States Attorney for the Southern District of New York, announced that DAVID HU, a managing partner and the chief investment officer of the New York-based investment advisory firm International Investment Group (“IIG”), pled guilty today before U.S. District Judge Alvin K. Hellerstein to investment adviser fraud, securities fraud, and wire fraud offenses in connection with an over $100 million scheme to defraud IIG’s investment advisory fund clients and investors.

Throughout the course of more than 10 years, HU perpetrated the scheme by, among other fraudulent actions, creating fictitious investments and overvaluing investments used to generate funds to pay off earlier investors in a Ponzi-like manner.

In connection with his plea agreement, HU has also agreed to forfeit more than $129 million representing proceeds traceable to the commission of the offenses.

Manhattan U.S. Attorney Audrey Strauss said: “Today, David Hu admitted to shirking his fiduciary responsibilities and defrauding IIG funds and investors for more than a decade, causing millions of dollars of losses. Hu mismarked millions of dollars of loan assets, falsified paperwork to create fake loans, sold overvalued and fake loans and used the proceeds from those sales to pay off earlier investors, and falsified paperwork to deceive auditors and avoid scrutiny.  He now faces a serious term of imprisonment.”

According to the allegations contained in the Information and based on statements made in Manhattan federal court:

Background of IIG

HU and a co-conspirator (“CC-1”) founded IIG in 1994. HU was a managing partner and the chief investment officer of IIG. IIG, an SEC-registered investment adviser, provided investment management and advisory services, including for three private funds that it operated: (1) the IIG Trade Opportunities Fund N.V. (“TOF”); (2) the IIG Global Trade Finance Fund, Ltd. (“GTFF”); and (3) the IIG Structured Trade Finance Fund, Ltd. (“STFF”).  IIG also advised the Venezuela Recovery Fund (“VRF”), a fund that managed the remaining assets of a failed Venezuelan bank (VRF, together with TOF, GTFF, and STFF, the “IIG Funds”).  In March 2018, IIG reported to the SEC that it had approximately $373 million in assets under management.

IIG advertised itself as specializing in global trade financing, particularly in providing trade finance loans to small and medium-sized businesses.  IIG’s principal investment advisory strategy, including with respect to the IIG Funds, was investing in trade finance loans that it also originated. Trade finance loans are used by small and medium-sized companies, typically exporters and importers, to facilitate international trade. IIG’s purported expertise was in trade finance loans to borrowers located in Central or South America, and in a variety of industries, with a stated focus on “soft commodities,” such as coffee, agriculture, fishing, and other food products. IIG’s trade finance loans were purportedly secured by collateral, such as the underlying traded goods, assets held by the borrowers, or expected payments by third parties.

Investments in TOF, STFF, and GTFF were marketed by IIG to institutional investors, such as pension funds, hedge funds, and insurers. In offering memoranda and communications with investors, IIG advertised strict risk controls, such as promises to use diligence to carefully select borrowers or issuers with trusted management and marketable assets, and portfolio concentration limits based on borrower, developing country, and industry.

IIG purported to value the trade finance loans in the IIG Funds on a regular basis. IIG and, in turn, HU, received a performance fee with respect to the IIG Funds, as well as a management fee, which was calculated as a percentage of the assets under management held in the Funds.

The Scheme

From approximately 2007 to 2019, HU conspired to defraud investors in IIG-managed funds by: (i) overvaluing distressed loans held by the IIG Funds, (ii) falsifying paperwork to create a series of fake loans that were classified, fraudulently, as positively performing loans, and to otherwise hide losses, (iii) selling overvalued and fake loans to a collateralized loan obligation trust and new private funds established and advised by IIG, and (iv) using the proceeds from those fraudulent sales to generate liquidity required to pay off earlier investors in a Ponzi-like manner.

The scheme HU participated in involved, among other things:

  • Mismarking Defaulted Loans.
    HU and CC-1 caused IIG to mismark the value of multiple loans that had, in reality, defaulted (the “Defaulted Loans”).  Instead of acknowledging the defaulted status of these loans, HU and CC-1 instead caused IIG to mark the Defaulted Loans at par plus accrued interest, even though HU and CC-1 knew that the borrowers’ default significantly impaired the true value of these loans.  HU and CC-1 certified these false valuations and caused them to be reported to investors.
  • Mismarking Distressed Loans.
    HU and CC-1 caused IIG to mismark multiple loans that were distressed (the “Distressed Loans”).  These Distressed Loans included, for example, loans for which the borrowers had missed multiple scheduled payments.  Even though HU and CC-1 knew that the non-performing status of the loans significantly impaired their true value, they nevertheless caused IIG to continue to mark the loans at par plus accrued interest.
  • Creating Fictitious Loans.
    With respect to TOF, in order to hide the losses resulting from the Defaulted Loans, including from auditors reviewing TOF’s financials, HU and CC-1 removed the Defaulted Loans from the TOF portfolio, replacing them with tens of millions of dollars in fictitious loans to purported borrowers in foreign countries (the “Fake Loans”).  HU and CC-1 also created or directed the creation of documents to keep in IIG’s files as purported documentation of the Fake Loans.  To pass auditor scrutiny, HU and CC-1 also directed purported borrowers – sham  foreign entities that were controlled by IIG’s business associates and that did not engage in actual business – to provide confirmations of the Fake Loans to auditors, including by arranging for TOF to pay a monthly fee to one purported borrower in exchange for providing false confirmations.  In reality, these purported borrowers did not receive a loan from TOF, and were not expected to make any payments to TOF.
  • Using a CLO Trust to Create Liquidity through Investments in Fraudulent Loans.
    In or about 2014, HU and CC-1 obtained approximately $220 million in bank financing to create a collateralized loan obligation trust (the “CLO Trust”), for which IIG served as an investment adviser.  HU and CC-1 then engaged in various deceptive acts, using the CLO Trust, to hide TOF’s losses and generate liquidity for TOF, which was facing investor redemption requests and demands for repayment of loans that IIG had taken from international development banks.  For example, in its capacity as investment adviser for the CLO Trust, IIG, through the efforts of HU and CC-1, caused the newly-created CLO Trust to purchase loans from the TOF portfolio, including Defaulted Loans, Distressed Loans, and Fake Loans, which generated liquidity for TOF.  After the CLO Trust purchased loans in the TOF portfolio, IIG, through the efforts of HU and CC-1, generated additional liquidity by causing the CLO Trust to issue securitized debt instruments based on these loans, payable in various tranches to investors in the CLO Trust.
  • Using the CLO Trust and Panamanian Shell Entities to Cover Up Losses.
    IIG, through the efforts of HU and CC-1, also caused the CLO Trust to create new fraudulent trade finance loans, and used those new fraudulent loans to cover up TOF’s losses.  Specifically, HU caused the creation of shell entities domiciled in Panama (“Panamanian Shell Entities”) that were controlled by an IIG nominee.  Then, HU caused the CLO Trust to enter into fake loan transactions with the Panamanian Shell Entities. HU caused the creation of fake promissory notes and other paperwork to conceal the fraudulent nature of the loans to the Panamanian Shell Entities. Finally, under the guise of the fake loan transactions with the Panamanian Shell Entities, the CLO Trust disbursed funds that HU and CC-1 diverted to TOF in order to pay off TOF’s various debts and obligations.
  • Generating Liquidity by Selling Fraudulent Loans to a Newly-Created Funds Backed by a New Investor.
    In or about 2017, HU and CC-1 targeted a foreign institutional investor (“Institutional Investor-1”) to raise money for two new private IIG managed funds: GTFF and STFF. Institutional Investor-1 provided $70 million as the seed investment for GTFF, and, later, $130 million as the seed investment for STFF.  HU and CC-1 caused GTFF and STFF to purchase at least approximately $100 million in fake, distressed, defaulted or otherwise fraudulent loans.
  • Inducing a Retail Mutual Fund to Invest in a Fictitious $6 Million Loan.
    In or about December 2012, IIG became an investment adviser to an open-ended mutual fund marketed to retail investors (the “Retail Fund”). As an investment adviser to the Retail Fund, IIG made investment recommendations, including recommendations that the Retail Fund invest in trade finance loans originated by IIG.  In or about February 2017, a borrower (the “Argentine Borrower”) had failed to pay the principal on an approximately $6 million loan (“Loan-1”) in which the Retail Fund had invested and which was nearing its maturity date.  In or about March 2017, HU caused approximately $6 million to be transferred into an account associated with the Argentine Borrower from the account of a different borrower (“Borrower-1”), and further directed the funds from Borrower-1’s account to pay off the debt owed by the Argentine Borrower to the Retail Fund.  To replace the funds from Borrower-1’s account that were used to make it appear as though the Argentine Borrower had repaid its debt to the Retail Fund, HU fraudulently induced the Retail Fund to invest in a new, fake $6 million loan to the Argentine Borrower (the “New Loan”).  HU then directed that the proceeds from the fraudulently induced New Loan be transferred into Borrower-1’s account, effectively reimbursing the account for the earlier $6 million transfer to the Retail Fund.  To further conceal the fraudulent nature of the New Loan, HU caused the creation of forged documents to make it appear as though the New Loan was a legitimate loan to the Argentine Borrower.

*                      *                      *

DAVID HU, 63, of West Orange, New Jersey, pled guilty to one count of conspiracy to commit investment adviser fraud, securities fraud, and wire fraud, which carries a maximum sentence of five years in prison; one count of securities fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.  Sentencing before Judge Hellerstein has been scheduled for June 17, 2021, at 9:00 a.m.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the investigative work of the FBI and also thanked the SEC for its assistance.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Drew Skinner, Negar Tekeei, and Alex Rossmiller are in charge of the prosecution.

Topic(s):
Securities, Commodities, & Investment Fraud
Contact:
James Margolin, Nicholas Biase (212) 637-2600
Press Release Number:
21-017

Bron: Department of Justice, U.S. Attorney’s Office (Southern District New York)

Naschrift KKC

Vonnis van 19 februari 2021 over Stephen Capella hier

Noot: Hoewel dat nergens lokaal door de journalistiek wordt opgepakt, is dit het complete girobank verhaal dat werd gepubliceerd op 28 januari 2021: “Advisory Firm Pleads Guilty To Defrauding Clients And Investors In Over $100 Million Ponzi-Like Fraud Scheme” (bron: https://www.justice.gov/usao-sdny/pr/managing-partner-investment-advisory-firm-pleads-guilty-defrauding-clients-and )

Manhattan U.S. Attorney Audrey Strauss said: “Today, David Hu admitted to shirking his fiduciary responsibilities and defrauding IIG funds and investors for more than a decade, causing millions of dollars of losses. Hu mismarked millions of dollars of loan assets, falsified paperwork to create fake loans, sold overvalued and fake loans and used the proceeds from those sales to pay off earlier investors, and falsified paperwork to deceive auditors and avoid scrutiny. He now faces a serious term of imprisonment.

International Investment Group (IIG) owners David Hu and Martin Silver in Malta plead guilty to defrauding clients and investors in over $100 million Ponzi-like fraud scheme

Girobank board of supervisory directors 2012: Ivan de Windt, Willem van Bokhorst Anthony Cijntje, David Hu, Philip Martis, Martin Silver, Dieudonné van der Veen in 2012. Thans blijkt dat twee leden van de raad van commissarissen van Curaçao Girobank en eigenaars van Malta International Investment Group (IIG) David Hu en Martin Silver  inmiddels schuldig hebben gepleit aan het bedriegen van klanten en investeerders in een Ponzi-achtig fraudeplan van meer dan $100 miljoen | Jaarverslag girobank 2012

Bron: Department of Justice, U.S. Attorney’s Office (Southern District New York)

Dit is het hele verhaal wat de Girobank heeft kapot gemaakt. De grote vraag is waarom de lokale journalistiek heel veel aandacht besteed aan zowel Eric Garcia en Stephen Capella (overigens beide fraude) maar geen journalistieke aandacht geeft aan de werkelijke omvang van de fraude, die 10x zo groot is.

Dit is de link naar de rol van de Maltese bank bij Girobank, beschreven door The Malta Times. De rechtszaken in New York van Girobank onder curatele tegen meerderheidsaandeelhouders David Hu en Martin Silver is hier te volgen:

http://iapps.courts.state.ny.us/iscroll/SQLData.jsp

Het nummer is 655968-2018. In nrs 41, 45 en 49 worden de rollen van Girobank bestuursleden Eric Garcia, Stephen Capella en manager Neysa Isenia-Schoop nader belicht.

Lees hier het complete Girobank dossier dat de KKC ten behoeve van haar trouwe lezers bijhoudt.

Dit artikel is geplaatst in

12 reacties

  1. “@Brian, Happy houreren bij de Heeren vanaf 4 pm tot 2 AM bij O mundo en noodregeling uitstippelen gaan niet goed samen. Zeker niet als je met je vehicle om 2 uur nog in een zijweggetje van de Lyraweg sneakt om te bysiden om vervolgens voor zonsopgang weer te moven
    Alsof de buren de auto niet herkennen.”
    Naar horen zeggen zeiden de bysides aan het einde van iedere sessie “Macha danki, thank you, dankuwel!”

  2. …..”Welk toezicht heeft de CBCS geleverd?….

    @Brian, Happy houreren bij de Heeren vanaf 4 pm tot 2 AM bij O mundo en noodregeling uitstippelen gaan niet goed samen. Zeker niet als je met je vehicle om 2 uur nog in een zijweggetje van de Lyraweg sneakt om te bysiden om vervolgens voor zonsopgang weer te moven
    Alsof de buren de auto niet herkennen.

  3. Als ik dit zo lees en de link met Girobank vraag ik me af wat de Centrale bank heeft gedaan. Welk toezicht hebben ze geleverd?

    Geen toezicht. Lijkt me duidelijk

  4. De “soep” groep heeft in de haast haar gulzige zakken te vullen, hele zoute soep gemaakt.

    Waardoor alles in de soep loopt in de verschillende onv entiteiten!

    Sòpi purá ta sali salu ( malu)

  5. Een van de manieren hoe de elite zich in stand houdt is door te schermen met het te kort aan gekwalificeerde mensen, waardoor je steeds de zelfde mensen ziet opduiken en er gehopt word van het ene naar het andere schandaal.
    Maar dat tekort is:
    A gecreëerd, door het opleidingsniveau op een derde wereld niveau te brengen komen er minder geslaagde terug uit het buitenland
    B niet juist, personen die niet tot de juiste politieke partijen horen (of doneren). Komen niet in aanmerking voor een leidinggevende functie en zijn gedoemd om onder een baas te werken die minder capaciteiten etaleert. Voor een bedrag dat lager ligt als de zelfde baan in het buitenland.
    Het is een vies spel waar de winnaars, waarschijnlijk op de achtergrond soep aan het maken zijn bij de yacht club.

  6. Prachtig dossier, compliment aan de Knipselkrant die de lokale journalistiek ver is ontstegen.

    In de Raad van Commissarissen zie ik Anthony ‘u betaalt, ik schrijf’ Cijntje, Philip Martis voor wie deze job een lucratieve schnabbel was naast zijn salaris van meer dan een miljoen bij de SVB en last but not least de zelfbenoemde goeroe corporate governance Neetje van der Veen.

    Die geeft daar met die andere nitwit van een commissaris, Karel Frielink van Insel Air, lessen in tegen een uurtarief dat zelfs Henry Jourdain niet durft te factureren.

    En Neetje van der Veen, a complete failure als commissaris bij Girobank, staat nu hoog op de payroll van onze Algemene Rekenkamer.

    Het is te idioot voor woorden, iemand die bij Girobank bewezen heeft geen toezicht te kunnen houden laten we toezicht houden op ‘s (ei)lands financien.

    Zoals we iemand van wie bij Girobank geconstateerd werd dat zij niet integer was en niet geschikt voor een directiefunctie (Neysa Isenia) doodleuk weer directeur maken bij Aqualectra.

    What’s next? Grote Giro Graaier Stephen Capella als nieuwe MinFin waarna zijn moeder de automatisering van dat ministerie van Bearingpoint overneemt met haar Panamese Avalon software?

  7. Cbcs heeft ook weer hier verzaakt en de belastingbetaler gaat hier voor opdraaien.

    Om een beruchte Curaçaose bank rover te citeren
    “Macha danki, thank you, dankuwel!”

  8. De Centrale bank heeft een centrale rol gespeeld bij de toestemming/ screening van deze HU figuur. Duidelijk dat het management van de CBCS niet deugd, niet zuiver is, of enorm zat te slapen.

    De RvC van de giro trouwens ook!

    Nos mes por!!!

  9. Als ik dit zo lees en de link met Girobank vraag ik me af wat de Centrale bank heeft gedaan. Welk toezicht hebben ze geleverd? Hoe is het mogelijk dat deze lui zaken deden en eigenaar werden van de Girobank. Liggen ze te slapen bij de Centeale bank?

Geef een reactie

Vul alstublieft uw commentaar in!
Vul hier uw naam in

Zoeken

Recente reacties