| U.S. charges OLINT’s David Smith with fraud, money laundering | | Print | |
| Thursday, 19 August 2010 12:28 | |||
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Providenciales resident David A. Smith was charged Aug. 18 in U.S. District Court in Florida with fraud and money laundering in a $200 million Ponzi scheme he operated from the Turks and Caicos Islands, Jamaica and Florida. Smith waived his right to be indicted by a grand jury, allowing the U.S. Attorney for the Middle District of Florida in Orlando to charge him with four counts of wire fraud, one count of conspiracy to commit money laundering, and 18 counts of money laundering. The government also seeks to seize $128 million that Smith handled through allegedly fraudulent wire transfers; a Windermere, Fla., residence; various jewelry and precious stones; and $40,000 that Smith transferred to a husband and wife, according to court documents. Smith, a Jamaican citizen, also faces numerous similar charges in the TCI, and he is free on bail. Prosecutor Helen Garlick and her Special Investigation and Prosecution Team are heading the OLINT investigation here. Documents filed in U.S. District Court in Orlando explained how Smith created private investment clubs claiming to trade in foreign currency for more than 6,000 investors. In 2005 Smith incorporated Overseas Locket International Corporation (OLINT) in Panama and OLINT Corporation in Jamaica. In 2006 he created OLINT TCI Corporation Ltd., which received funds from people in the United States, Jamaica and other Caribbean islands, but not from the Turks and Caicos. Also in 2006, Smith and an unnamed TCI resident created TCI FX Traders Ltd. and received a mutual fund license from the Financial Services Commission. Smith promised clients returns on investments of 5-10 percent monthly with only 20 percent of their investment ever being at risk, prosecutors allege. But Smith never traded in foreign currency, instead making false account statements and paying clients “returns” with their own money — commonly called a Ponzi scheme. Smith is accused of transferring millions of dollars from the TCI to I-Trade FX, a company in Lake Mary, Fla., in which Smith was the majority investor. Smith and others then transferred money through JIJ Investments — a Florida company owned by “unindicted co-conspirators” — into accounts at different financial institutions, prosecutors allege. OLINT reportedly has $6 million of investors’ money tied up in TCI Bank Ltd., which was closed in April because of huge withdrawals and nonperforming loans. Creditors and shareholders may be able to save the bank with an offer from two Eastern Caribbean banks, but that would tie up OLINT money for up to five years. Click HERE to read the information charging Smith.
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