MIAMI, Sept. 10 (UPI) -- Yet another offshore bank that was criticized last year in a U.S. Senate report into money laundering has been taken over by regulators.
PricewaterhouseCoopers was appointed controller of Investors Bank and Trust Ltd., formerly known as Overseas Development Bank and Trust Ltd., in late August.
The action against the Dominica-licensed financial institution means that only two of the ten offshore banks that were featured in the Senate report published on February 5, 2001 are still open.
Six of the banks were closed within 12 months of the report being released, some within weeks, and two of them were closed at the time of publication.
IBT was taken over because it was "insolvent" and "unable to meet its obligations", according to Dominica's Prime Minister Pierre Charles. The bank is currently closed for business and it is not expected to reopen.
Its closure was considered inevitable by many observers, particularly since one of its shareholders, Leo Malcolm West, is serving a 61-month prison sentence imposed at Federal court in Florida on May 13, 2002 after he pleaded guilty to one count of conspiracy to commit money laundering. Two other former insiders, Richard F. Downes, an ex-director, and Julien Giraud, an ex-consultant, also pleaded guilty to conspiracy to commit money laundering earlier this year at the same court.
Additionally, IBT's Senior Trust Officer, Texas-based Gary Lynn McDuff, has previous convictions for burglary and money laundering, as well as acquittals for money laundering and bank fraud.
In recent weeks, IBT has also been implicated in an investment fraud being investigated by police and civil authorities in the United States and the United Kingdom. The investigation is focusing on one of IBT's clients, Terry L. Dowdell, of the United States, and one of its business partners, Dobb White & Co., a British firm of accountants.
On June 4, 2002, Dowdell admitted operating an investment fraud when he settled a complaint filed by the SEC at the U. S. District Court for the Western District of Virginia. Dowdell's scam raised more than $70 million for a "trading program" involving bogus "prime bank" securities that offered investors "virtually risk-free returns" of up to 160 per cent per year, stated the SEC.
The SEC has successfully frozen more than $21 million in banks located in the United States and an additional $7 million at banks in Guernsey, Ireland and Belgium.
In settling the action, Dowdell named other participants as Shinder Singh Gangar, Alan White and Ian Collins, who are all citizens of the United Kingdom. Gangar and White are partners in Dobb White & Co., which had a close relationship with Investors Bank and Trust and is believed to have received most or all of the bank's client funds.
Dobb White's offices in Nottingham and Leicester, England were raided recently by British police investigating investment fraud. The firm and its two principals, Shinder Gangar and Alan White, have a history of conflict with the UK authorities.
In November 1998, the Financial Services Authority obtained asset freeze orders against Dobb White, Gangar and White and successfully froze $15.7 million in UK and Luxembourg bank accounts. In 2000, Gangar pleaded guilty to two offenses involving failure to produce documents and information required by the FSA in its investigation of suspected illegal deposit taking.
Gary McDuff told UPI that IBT is owned by West, Terence De'ath, Iain McWhirter and Christopher Stone, who are all British nationals. De'Ath has particularly impressive credentials, being educated at Eton and Cambridge University, in England, and obtaining a Masters at Harvard Business School, according to his resume. IBT aggressively targeted pensioners in the U. S. and the U. K. in its promotional material, offering certificates of deposit purporting to pay 6 percent annual interest, with the prospect of another 6 percent as a "bonus".
Overseas Development Bank & Trust changed its name to Investors Bank & Trust, effective February 28, 2002, even though an unrelated bank based in Boston, Massachusetts already operates under that name.
"The new Directors of IBT wished to change the name from ODBT to distance ourselves from the stigma of bad management and poor past performance," Managing Director Christopher Stone told UPI.
(David Marchant is publisher of OffshoreAlert, offshorealert.com. Tel. 305-372-6267. Address: 123 S. E. 3rd Avenue, PMB #173, Miami, FL 33131, USA.)
