To no-one’s surprise the SEC came out yesterday and charged St. Vincent and the Grenadine’s Millennium Bank with being a Ponzi scheme. That’s because after the Stanford case broke, any good google search would come up with Millennium when looking for offshore banks. The blogs were all over it from the beginning. It even got TV time (Fox Business and perhaps othes) even before the SEC charged them yesterday.
I was asked about this bank several times, but there wasn’t much to say, these guys didn’t even bother publishing financial statements (false or otherwise).
So how did the SEC catch these guys? (They need hard evidence, remember).
They followed the money. It seems deposits to the bank, even those sent to St Vincent were FEDEXed back to Napa California where they would be put in a remote deposit machine to the United Trust of Switzerland’s account (Millenium’s holding company) at Washington Mutual. And they then paid everything from that account, including their own personal credit card expenses ($2.8 million), auto expenses $820,000 and wine $90,000. Airplanes? of course.
The defendants also paid out money to themselves. Some of it was more than they could spend, I suppose, so they set up investment Co’s. No news of “hedge funds” or if they had money with Madoff.
The take was at least $68 million, because that was the amount of cash deposited in the WaMu account. Millennium could have played this game in other jurisdictions also, since they catered to investors all over the world.
Big red face for WaMu compliance on this one. So much for the Patriot Act. Guess it doesn’t work well when the crooks are Patriots.