Two Bahamians are among six men hit by a multi-count indictment unsealed on Tuesday in a U.S. federal court over an alleged $500 million offshore asset protection, securities fraud and money laundering scheme based in Belize.
Bahamians Kelvin Leach, 34, and Rohn Knowles, 29 - both described as residents of Belize City - along with Robert Bandfield, a U.S. citizen; Andrew Godfrey, a Belize citizen; Brian De Wit and Cem Can, citizens of Canada, and six corporate defendants, were charged with conspiracy to commit securities fraud and money laundering.
Bandfield, Godfrey and Can were additional charged with conspiracy to defraud the U.S. government, according to court documents.
The indictment was unsealed in a federal court in Brooklyn, N.Y., on September 9. The U.S. has announced that it will seek the extradition of the men.
The Federal Bureau of Investigation (FBI) and U.S. prosecutors allege that Knowles, Leach and the other men, along with six corporate defendants: IPC Management Services, LLC; IPC Corporate Services Inc.; IPC Corporate Services LLC (collectively IPC Corp); Titan International Securities, Inc. (Titan); Legacy Global Markets S.A. (Legacy), and Unicorn International Securities LLC (Unicorn), defrauded legitimate investors in U.S. stocks by manipulating prices; helped their own clients evade paying U.S. taxes on bogus profits, and laundered $500 million in criminal proceeds.
The allegedly "corrupt clients" represented by those charged include over 100 unidentified U.S. citizens and residents, the indictment asserts.
Jacob Frenkel, a U.S.-based lawyer for Leach, Knowles and Titan International Securities, Inc., told Guardian Business in a statement that his firm, Shulman, Rodgers, Gandal, Pordy and Ecker, is "confident that our clients would be exonerated".
"Titan and its principals take seriously and comply with the laws and regulations of all countries in which they do business.
"The Department of Justice returned an indictment without even the slightest of advance notice to Titan, Mr. Leach or Mr. Knowles of an investigation, or an invitation to speak with prosecutors or regulators to resolve any concerns or inquiries," said Frenkel.
He added that his clients will "respond at the appropriate time and in the appropriate manner to the allegations".
Prosecutors claim that in order to conduct their alleged scheme, the defendants created shell companies in Belize and Nevis for their "corrupt clients" and placed nominees at the helm of these companies.
Investors whose ownership interest in the companies was hidden were able to manipulating stocks, make profits and transfer the proceeds back to the U.S. against U.S. tax and anti-money laundering laws, it is alleged.
The indictment was identified as part of efforts underway by United States President Barack Obama's Financial Fraud Enforcement Task Force (FFETF), created in November 2009, to wage an "aggressive, coordinated and proactive effort to investigate and prosecute financial crimes", according to a release issued by the FBI on the case.
Over the past three fiscal years, the United States Department of Justice has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, the release added.
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