A U.S court was given graphic details of the elaborate scheme that took place on the Caribbean island of Grenada by a group of american fraudsters who defrauded their clients of millions of dollars.

The case involved four fraudsters -- Rita Regale, Robert Skirving, Larry Barnabe and Mark Kennedy who were found guilty of bank fraud. The fraudsters were linked to the collapsed First International Bank of Grenada (FIBG) which helped to bankroll the ruling New National Party (NNP) government of Prime Minister, Dr. Keith Mitchell to its historic 15-0 win in the 1999 general elections.

During the criminal hearing, former Grenada Offshore Regulator, Michael Creft testified that he collected $100,000.00 from First Bank in campaign financing for the NNP. According to Creft, he gave Prime Minister Mitchell $50, 000 in cash and then NNP Treasurer, Anthony Joseph another $25, 000.00 and kept $25, 000.00 for himself and which he used to pay party officials for electoral work.

During the trial, evidence surfaced that former Grenada Director-General of Finances, Lauriston Wilson had given authorities in the Spice Isle early warning signals about the bank's suspicious dealings.

As a public service, GRENADA TODAY highlights some of the main points contained in the Sentencing Memorandum in the criminal trial of the four convicted offshore fraudsters:  

LAURISTON WILSON

First Bank hired Grenadian accountant Lauriston Wilson to conduct the annual audit required by Grenadian law. Wilson is a Chartered Accountant, the British equivalent of a C.P.A., and a former Accountant General of Grenada. His dealings with the Bank spanned from September, 1998 to March, 1999.

In numerous letters to and meetings with the Bank, Wilson tried diligently to obtain comprehensible records from the Bank. It simply never happened. He met with Brink and defendants Regale and Barnabe on a number of occasions.

He repeatedly pointed out the absence of adequate books and records and requested that they be provided. Many promises were made but none were kept. For example, in a meeting on February 10, 1999, attended by Brink and Barnabe, Brink promised that he, Barnabe, and Regale would provide certain information.

In the end, the information was so inadequate that Wilson refused to perform an audit. In the nearly three years of its existence, the Bank never established anything approaching an adequate set of books of records. This was well known among the defendants, particularly Barnabe and Regale.

Throughout his involvement, Wilson repeatedly sought confirmation of the Bank's assets. Beginning in December 1998, he sought documentation of the gold bullion supposedly held in Switzerland on the Bank's behalf.

When Brink refused to sign simple deposit verification forms, Wilson wrote that the forms were necessary to assure that the assets "really exist and are not fictitious or bogus." Brink never agreed to let Wilson verify the assets, the most basic of audit functions.

Ultimately, Wilson became so concerned about the Bank that he reported to the Prime Minister on March 26, 1999, his belief that the Bank was operating in violation of Grenadian laws. That same day Wilson was fired by the Bank.

After Wilson, the Bank hired Dennis Christie, a convicted felon, and Kenneth Craig, who had lost his American C.P.A. license, to perform financial work. They prepared a financial statement for the Bank which was not an audit. Their work was reprinted with a forged cover letter to make it look like an audit.

All the defendants were aware that FIBG was never audited. Yet they persisted in claiming the Bank was audited on a yearly basis, as in the IDIC brochure.

Far from providing a reliance defense, the defendants' dealings with accountants show their lack of good faith and how well aware they were of the illegitimate nature of their business.

GERALD BURTON

Gerald Burton was hired to provide legal counsel to IDIC. He was deposed in August 2006 in Barbados. He is the classic fall-guy in a fraud scheme. He was a newly licensed attorney, with few clients, working in the back office of a newspaper in the impoverished Caribbean nation of Dominica, when he was approached to provide legal services to IDIC.

He had no experience in banking, insurance, or high-yield investments. He was given minimal information and induced to write letters which the defendants then used to claim the Bank's assets had been "verified."

Burton saw paperwork relating to Bank assets, but that was all. He looked at the documents on their face, and assessed whether they purported to pass title from a prior owner to the Bank. He did not attempt to determine whether the assets actually existed or whether the purported owner actually had title to the asset.

In addition, he made no attempt to determine the value or marketability of the assets. The defendants knew all this. Burton's willingness to sign a letter which claimed that he had "verified" the assets does not give defendants grounds to claim reliance. Rather, it just shows that they found someone pliable enough to do their bidding.

Even Burton eventually became concerned about the viability of the Bank assets. In early 1999, he expressed his concern to defendant Ferguson. Although Ferguson briefly told Burton that he should further investigate the assets, Burton quickly realized he was not competent to do so. He urged Ferguson to hire accountants or other persons who could investigate the existence and value of the assets.

In response, Ferguson told Burton it would not be necessary to conduct such an investigation, because the Bank was undergoing an audit. Of course, this all occurred exactly when Wilson was being prevented from examining the Bank assets. No actual verification ever occurred, and the defendants, especially Ferguson, knew it.

JONATHAN KREMNER

Jonathan Kremner, an attorney admitted to the practice of law in Florida, New York and the UK, learned of FIBG from defendant Ferguson in late 1998. Ferguson told Kremner that his friend, Van A. Brink, owned FIBG, a rapidly expanding offshore bank in need of some legal and banking advice.

In June 1999, Brink offered Kremner the position of in-house counsel for FIBG. Initially, Brink had Kremner working with Mark Kennedy, FIBG COO at the time, to verify certain "assets." As Kremner got close to discovering that the Dai Ichi Kangyo bank notes were fraudulent, Brink pulled him off the verification task and had him focus on legal research projects.

Brink and Barnabe also asked Kremner to give presentations at OEI seminars conducted for promoters and potential Bank investors on the topics of securities and taxation. In one presentation, Kremner stood in for Ferguson and gave a lecture about the IDIC. Kremner was not involved in the day to day operations of the Bank. Indeed, he was banned from the Bank premises by Regale on his first day on the job, and subsequently worked from his rental home in Grenada.

He did not attend Board of Directors meetings and did not have access to the Bank's records or investor funds. He frequently complained to Mark Kennedy that he felt hampered in his ability to give legal advice because he believed that all the details of the Bank operations were kept from him.

During the course of the investigation, Kremner admitted he unlawfully sold a Bank certificate of deposit to a friend in the United States, and admitted filing a false tax return for the calendar year 2000.

He pled guilty to these charges and agreed to assist the government in its prosecution of the defendants in the case. On June 25, 2207, Kremner was sentenced to 36 months probation and ordered to pay $100,000 in restitution.