Receivers appointed for Millennium Bank

It is early days yet in the investigation by the United States Securities Exchange Commission (SEC) into the locally registered Millennium Bank, but the local regulator has issued a statement that the activities alleged by the SEC thus far appear to have taken place outside of St Vincent and the Grenadines.{{more}}

“Current information is that the majority of funds or approximately $68 million, as set out in the SEC complaint were deposited into UT of S, LLCs account with Washington Mutual/J.P. Morgan in Las Vegas Nevada,” said a statement issued by the International Financial Service Authority (IFSA) of St.Vincent and the Grenadines on Tuesday, March 31.

The IFSA’s statement further stated: “UT of S is not a Vincentian company but a Nevada limited company with its principal office located in Napa California. It is not believed at this stage that funds deposited to UT of S at the Washington Mutual/J.P. Morgan were ever remitted to Millennium Bank Inc. in St Vincent. According to the US SEC, investors’ cheques and wire transfers were not made payable to the Bank but rather to “UT of S,” “United Trust of Switzerland S.A.,” or “United Trust of Switzerland S.A.”

IFSA, however, said it is also investigating the possible commission of offences in St. Vincent and the Grenadines under the International Banks Act and other relevant law. “The Authority is also investigating discrepancies between amounts alleged in the US SEC Complaint versus amounts channeled through St Vincent and the Grenadines,” the release said.

On Thursday, March 26th, 2009, the SEC filed a complaint in the United States District Court for the Northern District of Texas Wichita Falls Division against Millennium Bank, with its offices at Stoney Ground, Kingstown, United Trust of Switzerland S.A., UT of S, LLC, Millennium Financial Group, William J. Wise, proprietor of Millennium Bank, his wife Lynn Wise, and several of his associates.

The SEC, in its complaint, alleged that from approximately 2004 through the present period, Millennium Bank, acting through William Wise, his counterparts, and others whom they direct, had obtained at least US$68 million from approximately 375 investors, purported to be invested in self-styled “certificates of deposits” by promising return rates up to 321% higher than legitimate bank issued certificates of deposit also called (“CDs”).

The SEC outlining Millennium Bank’s alleged involvement in the scheme is asserting that the defendants, to create the appearance of a legitimate off-shore investment, instructed investors to make cheques payable to UT of S, LLC, to purchase the so-called “CDs” and mail the cheques to Millennium Bank in St.Vincent and the Grenadines. Once received, the cheques were packaged and delivered via Federal Express or regular mail to UT of S, LLC’s office in Napa, California, where they were all electronically deposited by a remote deposit machine into a single UT of S, LLC bank account at Washington Mutual/JP Morgan Chase Bank (“WAMU”).

IFSA has since appointed Kris Beighton of KPMG, Cayman Islands, and Charles Thresh of KPMG Advisory Limited as joint receivers of the Bank. The role of the receivers is to preserve the bank’s records and assets. (HN)