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BVI court
confiscates Bermuda-based mutual funds
Date Posted: May 04, 2008.
ROAD TOWN, BVI: A court in the British Virgin Islands has
confiscated more than US$45 million from a Bermuda-based
mutual fund which pleaded guilty to serious fraud-related
crimes.
Justice Indra Hariprashad-Charles of the Eastern Caribbean
Supreme Court in Road Town, BVI, ordered that $45.5 million
be confiscated from IPOC International Growth Fund Ltd.
Prosecutors say it may be the largest court order of its
kind ever made in the Commonwealth.
Justice Hariprashad-Charles further ordered three other
defendants -- BVI-based International Business Companies
Lapal Limited, Albany Invest Limited, and Mercury Import
Limited -- to pay a total of $2.2 million in costs and
$300,000 in fines for their part in the offences.
The order came after the four companies pleaded guilty on
April 30 to furnishing false information and perverting the
course of justice, both contrary to the Criminal Code, 1997.
The court's order followed a 17-month investigation by
authorities in the British Virgin Islands and Bermuda. It
was alleged that between 2004 and 2005, the IPOC group lied
about the source of $40 million which had been lodged with
the court as part of a separate, civil matter.
Lead lawyer for the Crown, Hodge Malek, QC, told the court
“These are serious offences. There was a concentrated effort
to mislead the court.”
The BVI’s Director of Public Prosecutions, Terrence Williams
says the prosecution of the IPOC case shows the Territory’s
commitment to protect the integrity of the criminal justice
system.
“Our successful prosecution of the IPOC case also
demonstrates the fact that the BVI strictly regulates the
corporate entities which operate in our jurisdiction. It
shows that we will not allow BVI corporate vehicles to be
used improperly,” he said.
The investigation and prosecution of the IPOC case was
carried out with the cooperation of authorities in Bermuda.
A Memorandum of Understanding regarding the IPOC
investigation was signed between the two jurisdictions in
July 2007.
Malek told the court that the Bermuda and British Virgin
Islands governments spent a combined $2.3 million on the
investigation. He noted that the evidence in the case
amounted to more than half a million pages of documents.
“I would like to thank the Virgin Islands’ Commissioner of
Police -Reynell Frazer for putting so much of his valuable
resources into the investigation of this case, and for
following through to its fruition,” Mr. Malek said.
The BVI’s DPP noted that the cooperation with Bermuda was
vital to the success of the case. “Today’s fraud is highly
international, and therefore good investigation requires
international cooperation,” he said.
Bermuda’s Director of Public Prosecutions Rory Field; Senior
Consultant to Bermuda’s Attorney General, Kulandra Ratneser;
and Inspector Gary Wilson of Bermuda’s Financial
Investigations Unit were among those in court to witness the
outcome of their investigations. Errol George, director of
the BVI’s Financial Investigations Agency, was also present.
Messrs. Malek and Williams appeared for the Crown and were
joined by three other lawyers from the BVI’s Office of
Public Prosecutions. IPOC International Growth Fund Limited
was represented by Andrew Mitchell Q.C. The other defendants
were represented by Richard Kovalevsky, Q.C.
