01 May 2008$45M Confiscated in Fraud Case
GISBVI Court Issues $45M Confiscation Order in Fraud Case
A court in the British Virgin Islands today confiscated more than US$45 million from a Bermuda-based mutual fund which pleaded guilty to serious fraud-related crimes. Justice Indra Hariprashad-Charles of the Eastern Caribbean Supreme Court in Road Town, BVI, today ordered that $45.5 million be confiscated from IPOC International Growth Fund Ltd. Prosecutors say it may be the largest court order of its kind ever made in the Commonwealth. Justice Hariprashad-Charles further ordered three other defendants—BVI-based International Business Companies Lapal Limited, Albany Invest Limited, and Mercury Import Limited—to pay a total of $2.2 million in costs and $300,000 in fines for their part in the offences.
The order came after the four companies pleaded guilty on April 30 to furnishing false information and perverting the course of justice, both contrary to the Criminal Code, 1997. Today’s court order followed a 17-month investigation by authorities in the British Virgin Islands and Bermuda. It was alleged that between 2004 and 2005, the IPOC group lied about the source of $40 million which had been lodged with the court as part of a separate, civil matter. Lead lawyer for the Crown, Mr. Hodge M. Malek, Q.C., told the court today: “These are serious offences. There was a concentrated effort to mislead the court.”
The BVI’s Director of Public Prosecutions, Mr. Terrence Williams, told the Department of Information and Public Relations that the prosecution of the IPOC case shows the Territory’s commitment to protect the integrity of the criminal justice system.
“Our successful prosecution of the IPOC case also demonstrates the fact that the BVI strictly regulates the corporate entities which operate in our jurisdiction. It shows that we will not allow BVI corporate vehicles to be used improperly,” he said.
The investigation and prosecution of the IPOC case was carried out with the cooperation of authorities in Bermuda. A Memorandum of Understanding regarding the IPOC investigation was signed between the two jurisdictions in July 2007.
Mr. Malek told the court today that the Bermuda and British Virgin Islands governments spent a combined $2.3 million on the investigation. He noted that the evidence in the case amounted to more than half a million pages of documents.
“I would like to thank the Virgin Islands’ Commissioner of Police Mr. Reynell Frazer for putting so much of his valuable resources into the investigation of this case, and for following through to its fruition,” Mr. Malek said.
The BVI’s DPP noted that the cooperation with Bermuda was vital to the success of the case. “Today’s fraud is highly international, and therefore good investigation requires international cooperation,” he said.
Bermuda’s Director of Public Prosecutions Mr. Rory Field; Senior Consultant to Bermuda’s Attorney General, Mr. Kulandra Ratneser; and Inspector Gary Wilson of Bermuda’s Financial Investigations Unit were among those in court today to witness the outcome of their investigations. Mr. Errol George, director of the BVI’s Financial Investigations Agency, was also present.
Messrs. Malek and Williams appeared for the Crown and were joined by three other lawyers from the BVI’s Office of Public Prosecutions. IPOC International Growth Fund Limited was represented by Mr. Andrew Mitchell Q.C. The other defendants were represented by Mr. Richard Kovalevsky, Q.C.
Criminal charges were filed against the four companies on Monday, April 21, and the defendants were committed to the High Court on Friday, April 25. The committal was carried out under the Committal for Sentence Act, which allows matters to be committed to an ongoing Criminal Assize when the defendants have indicated they are likely to plead guilty.
Oyster Publications Inc, PO box 3369, Road Town Tortola, British Virgin Islands, VG1110