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Post by Admin on Apr 4, 2014 10:35:26 GMT
Melchizedek was a king and priest mentioned during the Abram narrative in the 14th chapter of the Book of Genesis.
He is introduced as the king of Salem, and priest of El Elyon. He brings out bread and wine and blesses Abram and El Elyon.
In Christianity, according to the Letter to the Hebrews, Jesus Christ is identified as a priest forever in the order of Melchizedek, and so Jesus assumes the role of High Priest once and for all.
Contrary to what might be expected, the first priest mentioned in the Bible is not from the Tribe of Levi. In fact, the first priest is described before Levi is even born. In Genesis 14, we are introduced to Melchizedek, who is described as “Priest of God Most High.” Identified in Psalm 110 and extensively reflected upon in the Letter to the Hebrews, Melchizedek remains an elusive figure in the Scripture.
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Post by Admin on Apr 4, 2014 10:50:13 GMT
The Dominion of Melchizedek (DoM), is a micronation known for facilitating large scale banking fraud in many parts of the world.
The DoM was created in 1986 by Evan David Pedley and his son, Mark Logan Pedley.
An article in the Washington Post reported that DoM was "diplomatically recognized" by the Central African Republic, in 1993. As far as is known, DoM does not maintain a diplomatic mission or any other form of representation in the Central African Republic.
DoM's web site claims that it has since been recognised by Burkina Faso.
At one stage in the early 2000s, DoM maintained a post office box address in Canberra, the capital of Australia. Coincidentally, one of the individuals identified by Philippine authorities in November 1998 as the ringleader of a series of frauds perpetrated in the name of DoM was John Gillespie, a former Australian felon who was convicted on the basis of his involvement in the Fine Cotton horse substitution racket during the 1980s.
According to a media report originally published in The Nation (Bangkok) in 1999 - "hundreds of Filipinos, Chinese and Bangladeshis paid up to US$3,500 to Gillespie's gang for worthless Melchizedek travel documents," and some had also paid significant amounts of money to obtain "government jobs" on one of the uninhabited Pacific islands claimed by DoM.
Another fraud involving DoM is tied to Jeffrey Thayer, who was the Governor of the Bar Association from 1997 to 1999 and the current General Counsel and Humanitarian Projects Coordinator. Thayer practices law under a license granted by DoM, although he is not allowed to practice in California where was once licensed.
After being convicted of several financial crimes in the 1970s, including stock fraud, David Pedley was incarcerated. While in Mexican custody Pedley apparently died, though the circumstances are not clear. Some government regulators believe that David Pedley is still alive.
Mark Logan Pedley is the son of David Evan Pedley. He served as Chief Justice of the Supreme Court of DoM until elections on 2006-11-15 when he was replaced by Charles Balas. As a result of the elections, no member of the Pedley family any longer holds titles of authority in DoM. Pedley is the co-author of the Melchizedek Bible. In 1994, Pedley married Pearlasia Gamboa, a Filipina-American who became the first president of Melchizedek.
Pearlasia Gamboa was the first president of the Dominion of Melchizedek. She is a Filipina-American business woman with numerous aliases who has been involved in controversial international banking, investment, and financial development transactions, including alleged bank fraud and securities fraud, from 1990 through 2009.
There is a network called The Melchizedek and Pleiadian Light Network - "a global platform assisting in the anchoring and activating of the New Earth Templates of Divine Love and One Unity Consciousness in this Golden Age of Light."
There is also an Alpha and Omega Order of Melchizedek, connected to Theosophia.
The Pleiadians are an imaginary Nordic alien race from the Pleiades star cluster.
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Post by Admin on Apr 4, 2014 11:04:02 GMT
In 1997 a bankrupt american man named Gilbert A. Ziegler arrived on the island of Grenada carrying a Dominion of Melchizedek passport.
He applied for citizenship and renamed himself Van Arthur Brink.
He then founded a bank called First International Bank of Grenada Ltd and offered 100% interest.
The banks asset was a 10,000-carat ruby Brink reckoned he owned, that he claimed was worth about $20 million, though the banks initial capitalisation was apparently around $100,000.
Within a year the bank stated assets of $14 billion.
After a while, around June 1999, Brink moved to Kampala, Uganda and shortly thereafter the bank collapsed leaving its mysterious investors without any money.
In 2005 it was reported that Brink had died in Uganda.
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Post by Admin on Apr 4, 2014 11:24:19 GMT
January 29, 2004: Con-man or Struggling Angel? Uganda’s Infamous Ex-pat, Van Brink
International U.S. fugitive ex-CEO of bank with assets reportedly at $120-billion (USD) interviewed about intelligence reports labeling him a threat to national security and a federal indictment charging him with 140 criminal counts in January 2004.
American ex-pat, Van A. Brink, has been living in Uganda since June 1999. Colorful, somewhat mysterious and controversial throughout most of the past decade, he now stands as indicted under Title 18 of the United States Codes on some 140 criminal counts, including mail fraud, wire fraud, money laundering and forfeiture.
He was the Chief Executive Officer for two offshore banks from 1996 – 1999: Fidelity International Bank (of Nauru, a small island nation of about 10,000 population in the Central Pacific Ocean) and First International Bank of Grenada (Grenada being a small island nation in the Caribbean Sea of approximately 100,000 population). Both Nauru and Grenada are British Commonwealth nations, as is Uganda, where he took up residence in 1999. It is for his alleged criminal activities at Fidelity Bank and First Bank that the U.S. Department of Justice conducted more than five years of federal grand jury hearings and FBI investigations.
According to the U.S. Justice Department’s indictment of Brink, Fidelity Bank’s depositors were absorbed by First Bank in 1998. Brink resigned from Fidelity Bank and First Bank in October 1999. First Bank was placed into court-ordered liquidation in 2001, a liquidation process that is still continuing, conducted by the Grenada court’s appointed Liquidator, PricewaterhouseCoopers/Marcus A. Wide. FIBG Liquidator Marcus Wide last year retained the prestigious Kampala law firm of Shonubi Musoke & Co. as its advocates in Uganda, and has been pursuing Brink in Uganda with various court initiatives.
As some published accounts have it, Brink fled Grenada with local authorities hot on his heels, making his escape from that island one night on a Cuban submarine bound for Havana, and then flew on from there to Uganda. As premeditation or fortunate coincidence would have it, Uganda has no extradition treaty with the United States.
Why did Van Brink go to Uganda? What is he doing there? Why does the U.S. government seem so determined to make certain that he is sentenced to life imprisonment? And what light can he shed on the charges made against him?
When the news of Mr. Brink’s indictment was released in early January 2004, Offshore Informant sought and obtained an in depth interview with this most enigmatic man so that our readers might be appraised not only of the basic news of his indictment, but also with something of “his side” of the story.
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GATES: The natural first question would seem to be, “How does it feel to be indicted with something like 140 separate criminal charges in the United States?”
Brink: Reminds me something of a classic and darkly humorous hypothetical question based in American history. Abraham Lincoln was the sixteenth President of the United States. This was back in the 1860s, during America’s civil war. Lincoln signed the emancipation proclamation freeing the hundreds of thousands of black Africans who had been kidnapped in their native lands and taken to America in slave trading ships. In 1865, while seated beside his wife and in attendance at an evening theatrical performance at the Ford Theatre near the nation’ capitol, Lincoln was assassinated. An unemployed actor who was in attendance that night, a man named John Wilkes Booth, shot him in the head at close range.
The classic question I was referring to is phrased as if asked by a reporter at that scene: “Well, yes, there is that. But other than for all of that, how did you like the play, Mrs. Lincoln?”
GATES: Are you saying I asked you a heartless question?
Brink: No. It just reminded me of that question hypothetically posed to Mrs. Lincoln. No offence taken. To answer your question on how it feels-- it feels, well, unbelievable.
GATES: But you had to be expecting something like this. I mean with five years of FBI investigations and federal grand jury panel hearings, you had to know that there was some sort of intention to bring criminal charges against you.
Brink: Of course. And Mrs. Lincoln had to know that her husband wasn’t the most popular man in America. After all, half of the states succeeded from the Union and formed their own country, which brought about the American Civil War. Brother against brother. Hundreds of thousands of men on both sides of the conflict killed in battles spread over most of five years. Still, I dare say it seemed quite unbelievable to Mrs. Lincoln that her husband would be shot and killed that night at the Ford Theatre.
GATES: But Lincoln was President of the United States. You are a man charged with committing 140 criminal acts, contrary to the laws of the United States.
Brink: Correct. But as a matter of perspective, I left the United States in 1998, moving to Grenada, a separate country about 2,400 kilometers distant. I was founder, Chairman of the Board and Chief Executive Officer of a licensed Grenada bank and under legal obligation to live and to operate by the Grenada Offshore Banking Act of 1994. To the best of my ability I did so, reading that statute cover to cover numerous times and doing all I could to make sure the bank was in full compliance with Grenada’s laws. Where are Grenada’s charges against me for non-compliance with the law to which I was liable as CEO of that bank?
GATES: Presumably, your bank had many American depositors, thus the American government claiming jurisdiction.
Brink: The bank also had depositors from New Zealand, Australia, Canada, United Kingdom, Norway, Russia, Peoples Republic of China, Japan, South Korea, Cook Islands, Antigua and Barbuda, St. Christopher’s and Nevis, Dominica, British Virgin Islands and so forth. The bank had depositors from over 100 different countries as of when I resigned. The question arises-- to the laws of which nation is a bank’s chief executive liable to operate in accordance to? To the laws of the nation or state granting the banking license? Or to the laws of every nation from which the bank’s depositors may come?
Does Japan claim jurisdiction over the Managing Director of Standard Chartered Bank in Kampala for acts he does while at the bank in Kampala? If so, Stan Chart’s MD would be well advised to read up on Japanese laws and on the laws of every nation from which his bank has depositors. I would assume that this would include Rwanda, Burundi, Kenya, Tanzania, the Democratic Republic of Congo, Canada, the United Kingdom, and etcetera. Oh-- and don’t forget to read up also on the laws of the United States.
GATES: Do I detect a generous hint of sarcasm in your answer?
Brink: Well yeah, there’s that. You see, I know and those in real authority in the United States know that all of this is not really about what it is alleged to be about.
GATES: Elaborate, please.
Brink: It is not anything I can prove in court, but when all of the adversarial publicity started against me in December 1998 and January 1999, I made some discreet inquiries through some individuals I knew who had personal contacts in several high places in the US Justice Department, in the CIA and at the NSA to see what this was all about. I knew I was not a criminal. There had to be a rational explanation.
And it came back, not from one source, but from all three sources that were not in any way known to each other. I had been named – and the bank had been named with me – as a threat to the National Security Interests of the United States. Accordingly, I had been marked for absolute public humiliation and “take down.” The word given at that time was that the effort would be relentless until I was utterly destroyed.
GATES: You’re not serious. You can’t be serious.
Brink: I wish I weren’t.
GATES: Entertaining for the moment the notion that you are not a completely delusional and paranoid maniac on the loose who is in need of some serious medical and psychiatric care, can you take me back a few paces and possibly explain how this could be so? Why could you and an offshore bank in a tiny country like Grenada conceivably be considered a threat to the national security interests of the United States? I’ll assume you were not manufacturing and distributing Weapons of Mass Destruction or anything like that.
Brink: Speaking of sarcasm… No. Nothing like that. It is a long story. I’ll try to boil it down. Hmmm… It is really two stories that interweave a lot and spin off into a third and fourth story.
GATES: Start with the first story.
Brink: The banks. Fidelity International Bank and First International Bank of Grenada.
We started Fidelity in August 1996. Our total capitalization was US $100,000. The first couple months were organizational. We accepted the first deposit in October 1996, as memory serves me.
GATES: The indictment said Fidelity Bank was capitalized with US $100,000 and a ruby valued at US $20 million.
Brink: The indictment is incorrect about many things, including that. Fidelity was capitalized with US $100,000 and that was all.
Fidelity was intended to be a small operation serving a select, small handful of clients. I really didn’t want any more than ten or twenty depositors. Fidelity was my part-time hobby. I still worked full time doing something else. Fidelity was an outgrowth of the something else.
GATES: Would that something else be Wheatland Interests? The indictment mentions that you moved from Oregon to Hawaii in 1994 to operate Wheatland Interests, selling tax avoidance pure trust organizations.
Brink: Yes. Wheatland Interests. Wheatland had several clients who wanted me to manage their investments. I kept refusing for over a year. I couldn’t think of anything more boring than being involved in day-to-day cash management services.
But a few clients kept after me, saying that they just “knew” I was supposed to help them. I didn’t want to get involved with that sort of thing unless it was under a real banking license. After several months of researching various jurisdictions and the requirements for obtaining a banking license, since it had the least in capitalization requirements, Nauru was selected and one of Wheatland’s clients put up the required US $100,000 in capitalization. Fidelity was purchased for an additional $50,000. And then I didn’t have many more excuses, although I worked for another couple months at making sure administrative details were all in order-- an account into which the bank could accept deposits, a relationship with a bank management firm to which I could pass instructions on what to do with the cash, and so forth.
Fidelity didn’t advertise. Not one ad, not one promotional flyer, not one newsletter sent to Wheatland’s many clients. Nothing. Fidelity opened accounts for the three clients who had been pestering me the most. Then someone else heard of the bank. Then another and another. All by personal referrals of those who were pleased with the idea of private banking and earning favorable interest rates on savings deposits.
GATES: The indictment says that you offered rates of up to 300% annually.
Brink: Yes, for a few months First Bank did have a rate sheet offering annual rates of up to 300% simple interest. It was a graduated scale of interest rates; the rate offered being determined by the size of the deposit and the term for which the deposit was fixed. To my memory, no one ever qualified for the 300% rate. But, consider how even daring to have a rate sheet offering up to 300% interest might be considered a “threat” to National Security Interests, which I am sure we’ll discuss later.
And this wasn’t how Fidelity started. Fidelity started with a rate sheet offering interest on savings of from 6% annually to 15% annually-- all based on the term of for how many months or years a deposit was fixed.
My initial desire to handle only ten to twenty depositors was shattered in the first month. I think in the first three months of the bank’s operation we were working with over 50 depositors and it seemed to double each month after that.
By the spring of 1997 it became obvious to me that working through third party bank management companies was just too cumbersome. What we needed was a bank operation with its own physical facility and operating personnel. Back to researching jurisdictions. We came up with Grenada and First International Bank of Grenada was formed and licensed in October 1997.
Meanwhile, of course, we had been experiencing exponential growth in the number of depositors and the deposit volumes being handled. And early on we also discovered ways of earning and delivering higher interest rates on savings deposits. This, of course, had a compounding effect, numerically, both in the number of depositors opening accounts and the dollar volumes of deposits managed.
I think in the first month of Fidelity our total deposits were in the range of $500,000. Three months later we were probably at $5 million. By the end of 1998 we were pushing $50 million. On October 1, 1999, when I resigned, we were topping $100 million in deposits.
So this is the first story. The exponential growth factor in the bank’s depositor ranks and deposit volumes. To the banks that are losing deposits as their customers go to some other bank, it is called “disinter mediation.” Not a word bankers like to hear as relates to what is going on at their bank.
I was naïve enough not to keep this much of a secret. I let depositors know how the bank was growing in depositor numbers, in deposit volumes, in assets under management and in bank net worth. I wasn’t hiding anything. I gather that this information “leaked out” to some unhappy bankers and their governmental regulators in the United States. They could do the math. They could calculate the rate of attrition. A banking group that could grow from zero in total deposits to $100 million in deposits in just three years was something of a threat.
When you also look at what had become the bank’s typical offered interest rates on term deposits, which were from 40% simple per annum to 100% simple per annum, that really, really makes bankers nervous who are offering savings rates of from 2% per annum to 5% per annum. What if word of that continued to get out? How many depositors are going to sit still earning a maximum of 5% per annum when they could move at least part of their savings by bank wire to a bank offering (and consistently paying) up to 100% per year?
GATES: We will return to how your bank could offer such high interest rates. The indictment alleges that you perpetrated fraud upon depositors, a fraud that cost them all of their savings, an amount alleged to be something like $206 million. But for the moment, what about your second related story that somehow ties in to your being considered a threat to the national security interests of the United States?
Brink: Story two was a three-day meeting I attended and at which I acted foolishly.
GATES: I’d have to be honest and say that offering rates of 100% annually to depositors would seem to give you fairly good credentials as a foolish man, but what was this meeting and how is it you now admit to having acted foolishly that soon had you pegged as a national security interest to the United States?
Brink: The meeting was in Barbados in mid-November 1998. It was called “Global Forum – Offshore Financial Services.” I was too busy to go, but the bank’s attorney was going and insisted that I needed to get out more, meet my counterparts from around the world, mingle, network and probably get some new ideas. She was persuasive. I went, not having the faintest idea of what the agenda for this Global Forum happened to be.
So there I was at the Welcome Dinner the first night. The keynote speaker was the Prime Minister of Barbados. I was expecting him to brag on what a good job Barbados had done as an offshore jurisdiction in attracting more than $10 billion in foreign deposits in the space of just a few years. Yeah, yeah… I was expecting to yawn a lot.
Instead, what I heard made my blood boil. I heard that the Executive Council of the Organization for Economic Cooperation and Development had, in April of that year, issued a report titled “Harmful Tax Competition.”
The OECD’s report stridently attacked small developing countries that offered tax haven benefits to attract foreign investors and depositors, claiming it just wasn’t fair to those countries that needed to rely on income tax revenues.
I could barely sit still through the rest of his speech, a speech in which he said that Barbados, and offshore jurisdictions like it elsewhere, needed to come up with a way of placating the demands of the OECD and that this was the reason he had convened a Global Forum on Offshore Financial Services.
On the way out from dinner that night, I picked up a copy of the OECD’s report on Harmful Tax Competition. The more I read, the angrier I became. I couldn’t sleep. I hooked up my laptop computer and began writing an Open Letter to the Barbados Prime Minister.
I finished writing that letter of approximately 20 pages by about ten a.m. the next morning. I had the bank’s attorney read the letter. She quickly became agitated and asked me what I intended to do with it. I told her I was going to make 100 copies and hand them out to every panelist and delegate at the Forum.
Her agitation immediately turned to a look of horror. Terror, even. She pleaded with me not to act so foolishly, that if I did such a thing she was sure that I would be taken down and the bank would be taken down with me.
I was incredulous at such a suggestion. How could it be? Everyone had the right to free speech, even private bankers. I was just exercising my right to political free speech. She, a native of Trinidad and Tobago, told me that I just didn’t “get it.”
She went on to tell me that I didn’t understand the double standard that was at work between the developed nations and the developing countries of the world. The developed nations would never allow me to get away with distributing such information among the leaders of developing countries. Never, ever never! I was putting my life, as I knew it and the bank and all the lives of its employees and the depositors and their fortunes in extreme peril.
I told her she was hysterical and to get hold of herself. I was simply pointing out facts that could be verified by anyone who cared to do even modest research. No state secrets were being compromised. I was simply setting forth the facts and insisting that developing countries didn’t have to go for such nonsense that was clearly so contrary to their national economic interests.
And so I went and made 100 photocopies and marched over to the convention center and handed them out to everyone I met, also placing copies on the tables at which the invited panel members sat in each sub-topic room where delegates could choose to attend various discussions on the various aspects of offshore financial services.
The invited panel members were high-ranking government regulators in banking, securities, insurance, legal affairs and so forth—from the United States, from Canada and from the United Kingdom.
I then stayed to sit, watch and listen to the first afternoon session of the panel discussion on offshore banking. I watched as the various panel members picked up the open letters in front of them and scanned through a few pages, whispered a few comments to each other, cleared their throats and drank from their water glasses. Finally, one of them spoke. Holding my written masterpiece in his hands, he said only this: “Talk about a David soon to meet Goliath…” and then he tossed the open letter document back down on the table with what looked to me to be distain.
I fully expected to be invited to get up and have a few minutes to explain the paper I presented, at least for five minutes or so. But no. Not another word of reference was made to it or to any of its very clearly stated points by any of the panelists. The steamroller rolled on. After an hour or so I shrugged, got up and left. I’d had enough of listening to supposedly respectable men and women attempting to explain how the completely hypocritical and ludicrously punitive agenda of developed nations against developing countries was only reasonable. Horse feathers.
GATES: Excuse me, but you’ve gone on at some length about this meeting and your writing and delivering an open letter to everyone there. But you haven’t indicated what the letter had to say or why you think that is somehow relevant to you being viewed as a threat to the national security interests of the United States.
Brink: The letter was something of an overview of modern economic evolution, particularly as relates to income taxation and the treatment of foreign investors and depositors in countries such as the United States.
For instance, isn’t everyone aware that the industrial revolution and development of the manufacturing base in the United States occurred in an era in which there were no income taxes at all? No income taxes on personal incomes. No income taxes on corporate incomes. As U.S. President George W. Bush’s father once said, “Read my lips!” NO INCOME TAXES! Today, the United States is one of the most highly developed nations in the world.
The imposition of federal income taxes in the United States occurred in 1913. When the concept of an income tax was introduced, the rate proposed was 1% of annual income. That proposal was hotly debated in the U.S. Congress prior to its passage. Much of the debate was over whether to impose an absolutely irrevocable 3% ceiling.
Some Congressmen were concerned that without such a limit the income tax rate might just climb and climb, choking the economic life out of the American people. Other Congressmen argued against placing a 3% limit on the income tax rate. Their concern was that with a 3% limit, the tax rate would soon be increased to that limit, a limit three times greater than the rate they were being asked to agree upon. No way were they voting for that!
The Income Tax Act of 1913 was passed. The rate was 1% of income. No ceiling was imposed. And here we are today, where combined state and federal income tax rates in several states in America now exceeds 50% of income. And that’s cheap, compared with Canada and many European nations.
But remember, there were no income taxes during the industrial revolution that transformed America in the 1800s and early 1900s. Now we have the spectacle of the “have” and the “have not” nations. The “have” nations insist that the “have not” nations must pretend that they live in the same economic world as exists in the “have” nations, even though the “have not” nations are in conditions of dire national poverty.
During the 1800s, the disparity in national incomes between colonial master nations and the colonial nations was on the order of 5:1. In other words the average person in a colonial master nation was five-times better off than the average person in a colonial nation.
In this age of enlightenment, in this age of reason, in this age of global recognition of supposedly equal sovereignty of independent nations, in this age of developed nations often being called “donor” nations to developing countries, in this age where various grants given poor nations are cause for publicity photos in newspapers and heart-warming stories about the care that a developed nation is showing to an undeveloped nation, in this age when no one wants to refer to what is going on as “neo-colonialism,” what is the typical disparity in national incomes between the “have” nations and the “have not” nations? Is it now less than the 5:1 it was in the dark ages when Africans were routinely kidnapped and exported to be slaves in the “have” nations? Or has the gap actually widened? It is a fairly easy matter to calculate. Just compare Uganda to the United States.
What is the per capita annual income of Ugandans? I read a year or two ago a World Bank report touting Uganda as their best success story among developing countries and bragging that Ugandans were, on average, now earning more than $300 a year (still less than $1 per day).
Compare that with a per capita income in the United States pushing $30,000 a year for the average American. What is the difference?
Just a factor of the average American being 100 times more able to survive and compete in the global marketplace than is the average Ugandan.
And knowing all of this, the International Monetary Fund, the World Bank and the Organization for Economic Cooperation and Development insist that if Uganda and other developing countries are to have acceptable systems of government, they must tax incomes just like the big boys do. Never mind that all of the big boys achieved their foundational economic development in an environment that was income tax free.
And then we move into the realm of how the big boys treat foreign investors and foreign depositors. The OECD’s report ranted about the unfair tax competition of developing countries offering tax haven benefits to attract foreign investment. The OECD insists that developing countries must not offer income tax incentives to attract foreign capital.
Yet what do the big boys, the developed countries such as the United States, do?
There is no income tax assessed upon or collected from any investor who is not an American citizen or a Green Card carrying/immigrant visa holding resident alien within the United States. None. Any Ugandan can open a bank account in the United States, earn interest and never pay any income taxes to the US on those interest earnings. The same is true for those who invest in the American stock, bond or commodities markets. No income taxes on foreign investors or depositors. None. Never has been. Never will be. The consequent result, of course, is that the capital marketplaces of the United States are filled with enough available funds to keep the average interest rates charged borrowers for home purchases, business working or expansion capital, industrial and agricultural development all consistently in the single-digit rates of annual interest.
If, occasionally, rates increase to the double-digit category, there is social and political unrest and America’s politicians risk being booted from office in the next general election. This is what happened to Jimmy Carter in the late 1970s. Interest rates to commercial borrowers had climbed for a few brief months to the 20% range. It had forced lay-offs in business and industry. Unemployment rates had soared above 5%. It was totally unacceptable to Americans. Those politicians deemed responsible for the sorry state of affairs, no matter how nice they otherwise seemed to be, had to go.
Yet if a developing country dares to offer the same scenario to attract foreign investment capital to empower in its capital marketplace and economic development, that upstart developing nation is regarded and treated as the scum of the earth. Such developing countries will be put on financial sector “black lists” by an adjunct arm of the OECD. Economic sanctions will be imposed on such uncooperative nations for their having dared to think for themselves and exercised even the most basic principles of good national economics. That is what the OECD Report announced in 1998. And that is what occurred in 1999, 2000, 2001, 2002 and 2003. As a result, nearly all of the nations that were blacklisted have caved in to the demand to do away with their “offshore” tax haven sectors.
Grenada was blacklisted. One of the demands placed on Grenada by the IMF was that it close down and liquidate First International Bank of Grenada. That was while I was still CEO of the bank. At first, Grenada refused to do so. First Bank was a model economic citizen of Grenada. We were serving Grenada’s economic interests. Depositors had no complaints. Everything was working perfectly. Why should they close First Bank down?
The IMF made it clear in the way the IMF is quite experienced in doing. Grenada wanted to re-do its international airport. Grenada didn’t have the money to do so. The IMF said, “Close down First Bank and we will give you the money.”
Word of this leaked to me through a third party. The person who was the original source of the leak fled the country to put certain documents into a place of safekeeping as an “insurance policy” on his very life.
But this is getting ahead of things in the second story.
GATES: You started by saying that you acted foolishly at the meeting in Barbados.
Brink: Do you have any idea how much it pains a man to ever admit that a hysterical woman was right and that he was wrong?
First Bank attorney Marion Suite was right. Big time. First Bank Chairman of the Board and Chief Executive Officer Van Brink was wrong. Big time.
It took about three weeks from the moment I walked out of the Barbados Forum in disgust for the onslaught to start in the media. Daily. Weekly. Monthly. Month in and month out. Unrelenting. Van “David” Brink soon met his Goliath. And in case you are wondering, the world’s Goliath is bigger than I am.
I didn’t recognize what was happening at first. Even when I had my three sources check it out and they came back with the answer, I still didn’t “get it.” Some people think I’m a fairly bright guy. Maybe I am. But I can also tell you for a fact that for a bright guy, I can be a real slow learner sometimes.
GATES: I take it you feel you have been unfairly vilified in the press.
Brink: You could say that.
For instance, four years ago it was commonly reported in the press internationally that I brokered humanitarian aid treaties and cash for purchasing arms to various rebel factions fighting in the DRC in exchange for gold and diamonds. I did no such thing. The humanitarian aid agreements were just that: humanitarian aid agreements. Not one-tenth of one gram of gold and not one-tenth of one carat in diamonds was ever asked for or accepted by me, by the Union Reserve System URS or by First Bank in exchange for the humanitarian aid packages I attempted to put together.
To top that story off, do you know what a Canadian newspaper reported in early 2001? It reported that Van Brink, the “illegal financier” who was in league with Congolese rebels, financed the assassination of the late Democratic Republic of Congo’s President, Laurent Kabila.
Regionally, it was reported that I bilked various banks of up to $50 million in humanitarian aid that I refused to deliver the aid as promised, but chose instead to live a palatial lifestyle on stolen money. Internationally, it was reported that I was providing the money to buy the arms to keep the warring factions killing each other in DRC. Internationally, it was also reported that I was a close personal associate of Idi Amin and am living in one of his Ugandan palaces.
GATES: I’ve read one report of your indictment that also references the fact that you live in a palace here in Uganda. I’ve not actually seen an Idi Amin palace in Uganda. Where, exactly, is yours?
Brink: Well, I guess you could drive by State House or something, if you come to Uganda (“State House” is Uganda’s equivalent of the White House in the United States). That ought to keep the rumor mills churning for another couple years. It is fairly close to the Sheraton Kampala. I did stay at the Sheraton for my first three months in Uganda. Close enough, I suppose.
GATES: I know you have one or two other stories related to all of this, but I’d like to return to the topic of the interest rates offered by one or both of your banks. You said that after you had been operating for a while the typical rates on term deposits ranged from 40% annually to 100% annually.
Brink: Yes.
GATES: How is that possible? I mean the indictment is clear in the allegation that you defrauded investors. It seems to me that offering such unbelievable rates of return on savings deposits probably does constitute fraud.
Brink: Actually, it constituted my effort at honesty.
GATES: You can’t be serious. Let’s say that a bank charges 20% annually on a loan to a borrower. How can it pay 100% annually to a savings depositor? Wouldn’t you have to charge, say, 120% annually on your loans to figure out how to break even and turn a profit?
Brink: Neither Fidelity Bank nor First Bank were lending banks, other than as an occasional courtesy to a depositor who wanted to borrow against his or her savings account.
GATES: So how is it you could offer such high rates of interest? If I deposited with you $1,000 today, is there some way you could manage that deposit for me and return to me $1,000 in interest each year?
Brink: No, I couldn’t. For two reasons. First, Uganda’s central bank would have me thrown into a Uganda prison for banking without a license. I have no desire to go to prison.
GATES: Touché. But you understand my meaning. How could you offer such high rates of interest?
Brink: How could I not do so, is the question.
After I caved into the notion to go ahead and accept to manage other people’s money and we started taking on depositors at Fidelity Bank, offering relatively modest interest rates, something quite unexpected occurred. Not only did depositor ranks grow and gross deposit volumes take off into numbers that made my head spin, so too did investment opportunities start coming to us from every corner.
For a time we worked with someone who specialized in stock option trading. His monthly rates of return ranged from about 9% to 18%. One month it spiked up to 22%. During this era we changed our rate sheet so that it offered a top-end rate of 5% per month for a five-year term fixed deposit. I’m trying to remember. I think our bottom end rate for that depositor option was in the 2% per month range.
GATES: But with a rate sheet featuring rates that ranged up to 300% per year, with 100% per annum as typical?
Brink: It does kind of mess with your mind, doesn’t it? It took me more than a day to get there, mentally.
GATES: So how did you ever get to the place where you thought you could offer such astronomical rates of return?
Brink: Not only was the bank offered more and more in deposits, not only did depositor ranks grow and grow, not only did more and more investment opportunities present themselves, but something else happened too.
We started being offered huge assets. First, as “assets under management.” I can tell you that I think I had a difficult time keeping my mouth from dropping open and my chin from bouncing off the floor on the day when a man I’d never met before but who had heard about me from a friend came to me with a big file folder full of title deeds, government letters and certified real estate valuation reports and told me he had been praying about it and was convinced that he was supposed to place that package with my bank to manage. The package had a value of something like US $65 billion. Might have been a couple digits higher or lower. Hmmm. Can’t remember right now. But that was the start of the “something else” that occurred.
From that moment on it was virtually non-stop. Asset packages started coming to us all the time. $200 million here, $8.7 billion there, $3.8 billion, $300 million, $50 million, $25 million $47 billion, $4.2 billion. Three at $20 billion each. It just went on and on and on. Heady times. We soon got to the point where we were no longer interested in accepting assets under management. Too much work for too little pay.
We switched to a joint venture basis. The party bringing the asset would enter into a joint venture agreement with us agreeing to deed the asset outright to the bank so that the bank owned it free and clear and then we would share with that party 50% of whatever we could produce by way of income from that asset.
Once your head quits spinning with those numbers, your mind then chases you off in the direction of possibilities. Let’s say you were able to place $10 billion in assets and achieve a yield of just 4% per annum. How much is that? It is $400 million. Remember, though, you have to split the income 50/50 with the party who deeded the asset to you. That leaves $200 million.
Now if you have a bank with $40 million in deposits earning a maximum of 100% per year, how much do you still have that’s left over after paying your depositors all their promised yields? Let’s see. $200 million minus $40 million equals $160 million, since you still have the original $40 million to manage for the next year.
So can you afford to pay a depositor yield of 100% annually? Yes you can. And not all deposits were at that rate. Some were 2.5% per year. Some were 6% per year. Some were 30% per year, and so forth. If a few were at 200% per year, so what?
GATES: But why would you want to pay out such aggressive yields? Why not just pay normal yields and keep the additional yields as bank profits?
Brink: As I said, the rates offered were my attempts at keeping in the realm of honesty with the bank’s depositors. If it were not for our depositors, the other opportunities would not have opened up for us. I was convinced of that. How could I not see to it that the bank’s depositors were treated generously?
Two other factors also entered in to that decision. We wanted to become a bank that would change the world, including through humanitarian aid programs. But there is an expression that most of us are taught as children. “Charity begins at home.” How could I think to expand the bank into offering humanitarian aid, if I was not first of all committed to treating all depositors (those at home) with extreme generosity as well?
Then there is a basic fact of banking life. Depositors tend to choose their banking relationships based on convenience and accessibility, financial incentives (yield rates offered to them) and safety.
Located on a tiny island in either the Pacific Ocean or the Caribbean Sea didn’t exactly make either Fidelity Bank nor First Bank convenient and accessible. We had to focus on the other two factors—providing ample financial incentive for being a depositor and also that the asset structure of the bank was significant enough to allow for peace of mind concerning the safety of depositing in the bank.
GATES: And now you are under indictment for 140 counts of wire fraud, mail fraud, conspiracy, money laundering and forfeiture.
Brink: So I’ve been told.
GATES: If you don’t mind, let’s talk for a while about the charges themselves. What can you do to enlighten me on the circumstances surrounding the matters cited, the specifics of what did occur, and why you seem convinced that you are not someone who should be locked away for the next one hundred years or more and what you’re going to do about it?
Brink: Okay.
GATES: I read the Internet published court docket. It says that you have been served the entire indictment and all attachments that the U.S. Attorney’s office served this upon you through your personal attorney.
Brink: Yeah, I read that much too. But I have a something of a problem with that. You see, I have no idea who the government thinks is my attorney. I don’t have a personal attorney. Not here in Uganda. Not in the UK. Not in the United States. Not in any other country, either. I have no idea how many attorneys there are in the world, but it has to be ten million or more. Which one am I supposed to call?
GATES: I suppose that you could call the U.S. Attorney’s office and ask how you might obtain personal service on the delivery of the indictment that has been made against you.
Brink: No, there is a supposedly operating legal concept called “Due Process.” One of the requirements of Due Process is that a prosecutor makes a reasonable attempt to effect service upon an accused party and provides that accused party with full disclosure of the allegations standing against him and the evidence the prosecutor has in support of those allegations. I am not that difficult to locate. I have had not one hint of anyone attempting to locate me. Yet the internet-published court docket declares that the U.S. Justice Department was able to locate me for official service through my personal attorney. They didn’t and they haven’t.
GATES: Perhaps they had the court appoint an attorney for you so that they could serve that attorney and, therefore, comply with the requirements of due process?
Brink: That’s my guess. Reminds me something of what we watched on the full day of live television coverage on the capture of Saddam Hussein. We were shown over and over again a video clip of the man alleged to be Saddam Hussein being subjected to a personal examination of his body by nameless medical personnel who carefully looked into his mouth and strand-by-hair-strand through his hair. Were they still searching for the mysteriously missing weapons of mass destruction or something?
GATES: Who can forget?
Brink: Interspersed with this continual re-running of the video clip were live interviews with various American-appointed Iraqi officials insisting that Saddam Hussein would be given a fair trial, of course. And then he would be executed.
Now I’m no great fan of Saddam Hussein. What we’ve all been told through years of American and British media reports is that he was a ruthless and brutal dictator who is responsible for the deaths of tens of thousands of innocent Iraqi citizens and also of the deaths of thousands upon thousands of innocent Iranian citizens during the ten-year war between Iraq and Iran (for which America provided massive financial and arms support to Iraq, by the way—so in what way is it that the United States has the clean hands and pure heart to be casting the first stone at Saddam Hussein for his “crimes against humanity?”).
GATES: But that’s not the point, is it?
Brink: No, it’s not. The point is that in the Anglo-American judicial system an accused party is to be accorded the presumption of innocence until he is proven guilty of whatever alleged crime or crimes by a fair trial in a court of law and before a jury of his peers who consider only the facts, not the years and years of government-sourced, spin-doctored reports related to an individual. Tell me how that is even remotely possible with respect to Saddam Hussein, when American-appointed Iraqi officials are insisting that just prior to his execution, Hussein will be accorded a fair trial. With the verdict already concluded and the sentencing publicly announced before any of the evidence is examined, how can the trial be fair?
GATES: And how do you see this as relating to you and the indictment against you?
Brink: For the past five full years I have been officially denounced and effectively pronounced guilty of all manner of evil crimes against depositors. I have been paraded through the American and international media as the most notorious dirty rotten white-collar scoundrel of this generation. Front page news stories denouncing me in America’s leading financial daily newspaper, The Wall Street Journal, and also in the Los Angeles Times, the Miami Herald, the Toronto Globe, the Portland Oregonian, Canada’s National Post, the Vancouver Sun and on and on. And now the U.S. Justice Department is making sure I receive a fair trial in Portland, Oregon, by providing service of the charges against me to my unknown-to-me personal attorney?
I received a forward of an e-mail between two depositors who were discussing the fact that one of them had been contacted by the FBI to see if he wouldn’t be willing to be interviewed by a journalist working for a prominent Portland-area newspaper who was doing a “human interest story” on the criminal indictment story and how the bank’s failure impacted the lives of depositors. It is called “tainting the prospective jury pool.” It is highly unethical, if not outright criminal to do so. But that is what the U.S. Justice Department has been systematically doing for the past five years—attempting to make certain that when they do bring the matter to trail, the jurors have been already fully programmed to rendered the “Justice” Department’s desired verdict.
But back to my point: What does this unknown-to-me personal defense attorney know about anything? Only what he has read in the newspapers for five years and what the U. S. Attorney now insists are the facts. So now we have the scenario of a tainted jury being asked to render a verdict based on what the prosecution has presented and defended by one who knows nothing of the facts but what he has read over the years and whatever else the Justice Department may have shared with him. Is this the setting for a fair trial?
GATES: So let’s get into these presumed facts and what you know about them.
Brink: We can start at the bottom and work our way back up to the top. From what I’ve read, the last category of charges relates to Forfeiture. That is, those known items of property that were purchased with the proceeds of crime should be forfeited by each of the defendants.
In this category of what I understand is the case against me, the U.S. Government is demanding the Forfeiture by me of the alleged “palace” purchased by me here in Uganda.
A couple technical problems exist with this proposition. First, I didn’t purchase any Ugandan properties, palatial or otherwise. First Bank did purchase two executive homes in Mbuya, not palaces. The bank bought those two properties on the recommendation of someone in the Uganda Government. Further, First Bank later sold those properties under terms and conditions that it deemed acceptable to the bank. I was not an officer or a director of the bank at the time the bank decided to sell the properties. Neither was I the purchaser of the properties from the bank. Nor am I the present owner of the properties. Furthermore, I have no personal control over the properties in any way. How is it, then, that I can be made to forfeit the properties by an American court’s order? One can’t forfeit what one doesn’t have nor ever did have.
You can’t get to the Forfeiture provisions of American law without passing through the supposed criminal acts committed along the way. A property isn’t subject to Forfeiture unless it was obtained with the proceeds of crime.
From what I’ve read it appears that the Government concludes that the properties were purchased through moving the “proceeds-of-crime” purchase-funds through a money laundering system. It names certain banks that are described as “innocent conduits.” It alleges that the funds used to purchase the Mbuya “palace” were the proceeds of crime and money laundered through innocent conduit banks, rather than purchased directly with funds wired from the bank itself. And that, says the government, is the crime of money laundering.
GATES: I’ve read several allegations over the past few years that you were involved in money laundering. Before you press on, would you care to comment just on that topic?
Brink: No problem. Consider that only “dirty” money needs to be laundered. And this is how we normally think the term is applied in law. We think of drug lords and illegal arms traffickers with suitcases full of cash and needing to work out an arrangement with a corruptible banker to launder the money for them, that is, to pass the illegitimate funds through some sort of legitimate looking bank accounts so that they come out and are delivered to a final desired destination looking completely legitimate.
Early in the days of Fidelity Bank I saw that this could be a future problem, if we weren’t careful. Scores, hundreds and eventually thousands of people were transmitting funds to us. Neither Fidelity Bank nor First Bank had the manpower and resources to individually investigate each of the bank’s depositors. So I added this requirement upon depositors. In order to send funds to Fidelity Bank and to First Bank, the depositor had to get his or her home bank to add this text to the funds transmission: “The remitter is known to us and we are satisfied as to the source of funds.” Again, that was depositor’s own home bank that supplied the statement or we would not accept the deposit.
The transmissions that the banks received from depositors were of “clean money,” not “dirty money.” Under full banking responsibility the commercial banks that were transmitting funds to Fidelity Bank or to First Bank declared right on the transmission that the funds were “clean money,” that they knew the party sending the funds and were satisfied that the party’s source of funds was legitimate.
As non-American offshore banks, neither Fidelity Bank nor First Bank could receive US dollars by direct transmissions from depositors. We had to establish account relationships with commercial banks or trust companies to receive funds on our behalf. Then when we wanted to move those funds to pay yields to depositors, to make investments or to pay operating expenses, we instructed those commercial banks and trust companies to wire the funds out to the specified destinations. It is not unlawful for an offshore bank to operate in this manner. It is the ONLY manner in which an offshore bank may transact any funds in any currency whatsoever. The thing I was concerned with in respect to money laundering was simply that the funds we received were known to be and were certified by the commercial bank making the transfer to us as “clean money.”
GATES: So how is it, then, that the American government now insists that the funds used to purchase the Mbuya “palace” were the proceeds of crime and via money laundering?
Brink: That is a mystery to me as well. In recent years the laws in America have become so convoluted that no one really can make much sense of them. For instance, if a person owes income taxes in the United States and chooses to pay his landlord and other creditors instead this month or to advance additional working capital to his business, I think it possible for him to be prosecuted for both money laundering and income tax evasion, possible for anything he purchases to be made subject to forfeiture and possible for his company or his creditors to be demanded to return “the proceeds of crime” that they received from the money launderer/tax evader.
I received an e-mail from one American pen pal last week who was reading in a local newspaper that under the provisions of new Homeland Security Act, someone who was caught manufacturing illegal drugs had just been arrested under the charge of terrorism against the American people. And, of course, those arrested for suspected terrorism really have not much by way of legal rights at all. It is really getting pretty crazy over there. Many Ugandans I’ve met dream of somehow managing to obtain a visa to travel to the United States. It is ironic, since more and more Americans I know are beginning to dream about leaving that country and finding some place where they can live in peace and freedom, not under continual threat of terrorism against them perpetrated by their own government.
GATES: But that would be another topic.
Brink: Yes. Still, consider that in 1999 a bank in the British Commonwealth country called Grenada decided to purchase executive homes in another British Commonwealth country called Uganda, then sold those residences in the year 2000. In the year 2004 the United States government decides that the Grenada bank’s former Chief Executive Officer, who resigned from that bank in eight months prior to those sale transactions, should be charged under United States law with criminal money laundering because of the fact that the British Commonwealth Grenada bank operated through other commercial banks and trust companies in the only lawful and legal manner it was allowed to operate within the financial system. Like I said, it is getting crazy over there. Glad I’m here.
GATES: That brings up an interesting side topic of discussion. I’ve read that your coming to Uganda in the first place was because you were fleeing from Grenada and that you had chosen Uganda because it has no extradition treaty with the United States. How do you respond to that?
Brink: Yeah, I’ve read that too. It really is funny. I had no desire to go to anywhere in Africa, least of all Uganda. A white South African was constantly coming to Grenada to see me in efforts to persuade me to put bank finances behind this proposition of his or that proposition of his. One day in May 1999 he flew in and told me he urgently needed me to fly to Uganda to figure out a way to save a bank that served hundreds of thousands of rural peasants and was about to be closed down, leaving the peasants with no real access to financial services.
I told him that I was not about to fly out to Idi Amin’s country and risk being butchered as an unwelcome outsider attempting to meddle in the country’s affairs. No way!
He was indignant at my lack of current knowledge about Africa and told me that Idi Amin hadn’t been in Uganda since the late 1970s and was living in exile in Saudi Arabia, that a new day had come to Uganda and it just wasn’t like that anymore. He then told me that the reason he had made this special trip to see me was because everyone he knew who also knew me kept going on and on about how I was committed to helping “the little people.” Here was a golden opportunity to help hundreds of thousands of Africa’s struggling little people and I was closed minded to it because of remembered news stories that were more than 20 years old.
Well, he had me on that one. But I didn’t give in easily and still insisted that there was no way I was going to Uganda without an official invitation of some sort. He said he would arrange that. Within a few days I received a fax from a Major General Caleb K. Akandwanaho in Uganda whose name I couldn’t pronounce then and still have a terrible time trying to pronounce it, even when I look at it in writing. American minds and tongues simply have difficulty trying to wrap themselves around many Ugandan names.
The same day as I received the fax, my South African acquaintance called to make sure I had received it. I confirmed that I had, indeed. Still, a Major General is an army officer, not a government official. Army officers, even Generals, can come and go at the whim of superiors. What guarantee of my safety was an invitation from a Ugandan Major General?
He laughed and said that this particular Major General also happened to be the brother of Uganda’s President.
I still wasn’t ready to give in and told him that African presidents have a history of being deposed from power rather unceremoniously.
He laughed and said this Ugandan president had been the nation’s president for over fifteen years, that Uganda was politically stable, that the Major General would guarantee my safety and that he was the President’s own brother.
Well, he had me on all counts, starting with was I or wasn’t I really interested in helping little people? I agreed to go and did go, touching down in Entebbe in mid-June 1999 and being taken to the Sheraton Kampala where a room was waiting for me.
I met the Major General. He has since then been promoted to Lieutenant General. He is mostly referred to as Salim Saleh. Anyway, we met that same afternoon.
Talk about a meeting that was not at all anything like what I had been expecting. We met at an outdoor, downtown restaurant. It was my first real confrontation with Africa and the picture of the setting of that pleasantly sunny afternoon and of the people I met, how they looked and how it was all in such complete contrast with what I had imagined, will always be in my brain.
The General was wearing a dark blue shirt open at the collar and a light blue sports suit; there was no gold braid and chest full of medals or armed escorts snapping salutes. He asked what I would like for a late-lunch and if I objected to local food. Within a few minutes I was having my first-ever plate of matoke and peanut sauce, some steamed, spinach-like green leafy vegetables that wasn’t spinach, a drumstick and thigh of chicken. Not fried monkey brains or stewed elephant tongue. Welcome to Uganda.
Just as shocking to me was that after officials of Co-Operative Bank had given me their presentation on what that bank needed to meet the capitalization requirements of the Bank of Uganda, I turned to the General in private and asked what his interest in this whole arrangement was. What did he expect to get out of it?
He stole my heart with his answers.
What he wanted out of the deal was to see Co-Operative Bank made healthy again so that it could continue serving rural Ugandans where no other bank in Uganda cared to go. Without access to financial services through the presence of financial institutions such as Co-Operative Bank, he felt the potential for eradicating poverty in rural Uganda would be set back at least a decade. He didn’t want to see that happen and if there was anything he could do to help, he was committed to doing so.
I said something astute, like, “So, then, you are a major shareholder in Co-Operative Bank.”
His reply came with the look of a wounded man. No, he wasn’t a major shareholder in the bank. He was a man who loved his country, had fought and bled for Uganda and its people, people who were now desperately turning to him for help. He was embarrassed that he didn’t have the present personal financial capacity to provide the help requested and had been calling those he thought might know of someone who could help, which is how he heard of me and had sent me the invitation to come. He wanted nothing out of the deal other than the rescue of the bank so that it could continue serving rural Ugandans.
GATES: I did some research. According to a New Vision article, your offer to purchase an interest in Co-Operative Bank was declined because Uganda’s central bank determined you were not a fit and proper person. Is that not correct?
Brink: That’s the way the late-Governor of Bank of Uganda explained it at hearings before Parliament. I also read that.
GATES: But there’s more to the story than that?
Brink: Yes. Do you want me to get into it? It is all water under the bridge at this point. The Co-Operative Bank that then was is gone and can’t be resurrected.
GATES: I would like to hear your side of the story, if you don’t mind getting into it. We’ll get back to the questions you started to answer in a few minutes.
Brink: I intended to stay in Uganda for three days. Not having been to Africa before, I had no idea that it would take longer than three days to assess the situation, present a financial proposal and receive an initial reply from which the remainder of negotiations could be conducted with me back in Grenada. Three days turned into a week. A week turned into a month, then two months and so forth.
Basically, what we put together as a proposal, we did so in the first two days. It was moving the proposal forward to presentation to Bank of Uganda that took some time to come about.
After a few long weeks of waiting to present the proposal to Uganda’s central bank, I expressed frustration to an acquaintance I had made from Congo who was in Kampala at the time. He arranged for me to meet with the State Minister of Finance for Economic Planning. It was a late afternoon meeting. That former minister reviewed what we had, encouraged us and hand-wrote a covering note to the Governor of Bank of Uganda, then placed the covering note with our proposal in a large envelop and addressed it to the Governor, sealed the envelope, handed it to us, and called the Governor’s office to set an appointment for us.
The Governor had already left BOU for the day, but his secretary was kind enough to book us as the Governor’s 9 a.m. appointment the next morning. We left the State Minister’s office quite excited that we were finally underway.
Still operating on non-African time, I arrived at the Governor’s office at 8:30 a.m. the next morning. The Governor didn’t arrive in his office until 9:30, apologized for being late, explained that he was struggling with his health and it was taking him longer to get going in the mornings than it should.
I handed him the sealed envelope from the State Minister. He opened it, read the brief hand-written note, then told us that it really didn’t matter what our proposal offered, he and the Cabinet Minister of Finance had just the day before concluded to sell of the bank and its assets and had, accordingly, opened the sealed bids submitted by other commercial banks in Uganda for Co-Operative Bank’s assets. There was no re-sealing of the bids possible; the decision was irrevocable.
I’m sure our mouths were ajar on that. Finally, I asked him if he wouldn’t at least look at our proposal, assuring him that Co-Operative Bank could be made strong and continue in its mission of serving Ugandans. He was a polite gentleman and did take the time to read the Executive Summary of the proposal, glance through some of the financial exhibits presented and ask reasonable questions related to what he had read. Then he said that he wished he would have had the proposal in hand a week or two earlier, but there was nothing he could do at this point. Regrettably, his hands were tied.
GATES: Are you saying that the late-Governor lied to Parliament when he was questioned on why the Co-Operative Bank bailout offer was rejected?
Brink: No, I’m not saying that. He resigned shortly after our meeting that day. He was a man in rapidly declining health and died not long after those hearings. The Parliamentary hearings were not for months and months, maybe almost a year, after that meeting in the Governor’s office, months and months during which the international and local press took turns reporting on what a notoriously bad character I was.
It could be that during that time and especially in the days leading up to the Parliamentary hearings that BOU staff did assemble a file on Van Brink to give him assurance that such an answer really was putting “the best face” on the whole affair. I don’t begrudge him that. Nor do I call the late-Governor a liar. May his soul continue its rest in peace, his loved ones always cherish his memory and his years of service to his country be remembered with pride.
GATES: But in fact, Van Brink wasn’t the proposed new shareholder in Co-Operative Bank. First Bank was. Is that not correct?
Brink: That is correct.
GATES: And what was the offer you presented on behalf of First Bank?
Brink: First Bank accepted the numbers that BOU had written to Co-Operative Bank on what it needed by way of additional capital to resume operations. First Bank’s offer was for more than double that amount.
GATES: Why was First Bank’s offer delayed in presentation to Bank of Uganda (BOU)? By your earlier answer, it seems you did arrive in Uganda in plenty of time to make the offer. But days turned into weeks and weeks turned into a month or more or something like that.
Brink: Here is what I feel is the unfortunate part of the whole matter. I believe the delay was due to the fact that Co-Operative Bank’s officials disputed the capital deficiency calculation by BOU and spent crucial weeks attempting to argue BOU’s banking supervisor into what the Co-Operative officials believed to be the accurate calculation of capital deficiency.
During the on-going argument, I was sidelined and kept away from those meetings. I think Co-Operative Bank officials didn’t wish to see the interests of existing shareholders diluted at all, if possible. And if it was necessary, their view was to minimize the dilution of then-existing equitable interests in the bank.
The problem was that I hate arguing over money, something that is difficult for most businessmen to understand.
GATES: So why did you end up staying in Uganda? The Governor handed back to you the proposal on Co-Operative Bank, saying that his hands were tied. Yet you remained. Why?
Brink: I left the Governor’s office to return to the hotel to pack my bags and see if I could re-arrange my ticket to depart that evening, if possible. I called the two high ranking members of Parliament that had been interested in seeing the Co-Operative Bank bailout proposition successful to tell them the substance of the meeting with the Governor and that I was leaving. Both of them came to the hotel to plead with me to stay, assuring me that this decision to cannibalize Co-Operative Bank by the other local banks would not be allowed to stand. Parliament wouldn’t have it and they would see to that.
If I physically left Uganda at that point, they reasoned, I would be seen as a “not serious” muzungu (white person) who was here today and gone tomorrow with no true care for nor commitment to Uganda, and, therefore, their efforts at Parliament on behalf of Co-Operative Bank and its depositors would be in vain.
I agreed to stay.
I was then encouraged that for First Bank to be taken seriously at Parliament, the bank needed to demonstrate long-term commitments in the country by making other investments while we waited for the Co-Operative Bank situation to be turned around.
And so it was that over the space of a few months First Bank purchased the executive homes in Mbuya-- now seemingly known as “the palace”-- and the Cape Villa estate at Lake Victoria, also invested in a Lake Victoria hotel/resort operation and began to purchase negotiations at Nsimbe for a large tract of land there, upon which First Bank was intending to finance the development of low-income, moderate-income and high-income housing, a community center, school and medical clinic and commercial center as well. The bank also contributed to the building of a children’s hospital in another part of Uganda and to a project devoted to taking Kampala’s street kids off the streets, situate them in homes where they would be loved, fed, clothed and put in schools. Then there was a Kampala warehouse facility in which First Bank also invested to have renovated with a view in mind of using it as additional safekeeping facilities for First Bank.
GATES: What was your capacity with First Bank at the time since you had already resigned?
Brink: Well, from arriving in Uganda in June and up until October 1, 1999, I was still Chairman of the Board and CEO of First Bank. In July or August 1999, however, I became Chairman of the Union Reserve System. So from that time to my resignation at First Bank, I was acting as liaison between First Bank and the members of Parliament that wanted to see Co-Operative Bank saved, as one coordinating investments in Uganda for First Bank and as Chairman of the URS.
GATES: And in your spare time?
Brink: Ah, I see I’m not the only one capable of sounding a tad bit sarcastic.
What I worked on in my spare time became to me the most exciting project of all. I developed the concept and outline for the creation of the Union Reserve System with initial focus upon bringing humanitarian and economic development aid to war-torn Democratic Republic of Congo.
GATES: We’ll get back to that. For now, let’s return to some earlier questions that weren’t completely answered. First, it has been widely reported that you came to Uganda because you were fleeing from Grenada and because Uganda has no extradition treaty with the United States.
Brink: Yes, that has been reported. There’s not an ounce of truth in that report however, other than for the correct spelling of Grenada, Uganda, Van Brink and no extradition treaty between the Uganda and the United States.
As I think I made clear, I had no intention of coming to anywhere in Africa, but was manipulated into coming to Uganda for what I thought would be a three-day visit. I was not fleeing Grenada. I was anxious to return to Grenada as soon as possible—and I did fly back and forth to Grenada several times.
On the fact that there is no extradition treaty existing between Uganda and the United States, I had no knowledge of that when I decided in 1999 to completely relocate personally to Uganda. I didn’t learn of that lack of extradition treaty status until late 2000.
I learned about it on the Internet when one of my constant critics suddenly started accusing me of re-locating to Uganda because of that reason. I was incredulous at that and had a friend look up a list of countries that did or did not have extradition treaties with the United States. Sure enough, none exists between Uganda and the United States.
That same Internet critic of mine, by the way, also insists that I escaped from Grenada by the skin of my teeth with local law enforcement officials hot on my heels and that I made my escape at night on a Cuban submarine that took me to Havana, where I boarded a plane for Europe and from there to Uganda. That’s why I didn’t take his statement about extradition treaties too seriously.
GATES: So you’ve never been to Havana?
Brink: Yes, I’ve been to Havana. One of the advantages of having a Grenada passport. No restrictions on going to Cuba. So I have been from Uganda to Havana and back to Uganda again. All by commercial airlines flights, not by submarine passage. And not related to leaving Grenada, either. The Havana trip was in 2000 and related to the G-77 Chambers of Commerce and Industry of Developing Countries and their Steering Committee meeting held there in late-March, just prior to the G-77 Heads of State Summit meeting held in Havana in early-April.
I went to the G-77 CCI Steering Committee meeting at the request of Mr. Boney Katatumba, who was then President of the Uganda Chamber of Commerce and was also Chairman of the G-77 Chambers of Commerce and Industry of Developing Countries. He had asked me to review two feasibility studies the G-77 CCI had completed over the past decade related to the creation of a trade and development bank serving members of the G-77 CCI and to make a report at the Steering Committee concerning those feasibility studies and the way forward.
So I did attend that meeting. And I made a report. I told them that their expensive feasibility studies accomplished nothing and that they could commission additional studies and take another ten years discussing them and still remain in the same place they were that very day. Chairman Katatumba challenged me to write an action plan and to present it to the G-77 CCI Monitoring Committee meeting that would be held in Kampala in May of that year. He had pledged in his election acceptance speech as international Chairman that the trade and development project would be put underway during his tenure as Chairman.
GATES: The Steering Committee, the Monitoring Committee…
Brink: That’s right. In the expensive feasibility study conducted, it had been recommended that a Monitoring Committee be established to watch over the development and implementation of the G-77 CCI bank project. I think it was the only recommendation made in the study that also instructed on how to accomplish that much. The study had given no recommendations on how to actually fire up a working trade and development bank. Yet there was a monitoring committee regularly meeting to monitor what they didn’t have any comprehension of how or what to do, nor any written plan of any kind to follow in the doing.
GATES: And what became of that?
Brink: When I returned to Uganda I thought on and worked on an action plan for the establishment of such a bank and then presented it to the May committee meeting, as scheduled. That committee voted unanimously for me to spearhead the establishment of the G-77 World Trade and Development Bank. I agreed to do so under the condition that I would not stay as CEO once the bank opened. I would only work in its preliminary organizational and capitalization phase of establishment and find a suitably experienced chief executive to take over from there.
GATES: Again, what happened to that initiative?
Brink: I made preliminary arrangements to line up several billion US dollars worth of initial capitalization through one financially capable group.
GATES: Would that be First Bank?
Brink: No, not First Bank. Through a group of investors with an office in Malaysia.
GATES: And where is this G-77 World Trade and Development Bank today?
Brink: It doesn’t exist. The project was abandoned. Officials of the World Bank took Chairman Katatumba aside and told him that the G-77 CCI’s bank would never be allowed to get off the ground, not with my involvement in it. Immediately on the heels of that there arose contention among ambassadors to the United Nations over which country would be the host nation for the bank-- an issue that had been concluded years previously and had been designated Kenya. The World Bank moves in mysterious ways its wonders to perform for developing countries. Or something like that.
GATES: So the “World Bank” of the G-7 nations and primarily of the United States would not allow the world’s developing countries via the G-77 nations’ Chambers of Commerce and Industry to form their own trade and development bank? This is really making less and less sense.
Brink: Actually, it makes perfect sense on either one of two possible counts, if…
GATES: If what?
Brink: It makes perfect sense if the agreed agenda is to utterly discredit and ruin Van Brink because of a perceived threat he constitutes to the presumed national security interests of the United States. Or if, in general, the developed countries and their World Bank aren’t really that much interested in developing countries actually emerging into “have” nation status, rather than “have not” status. In this case, I think it was a matter of “killing two birds with one stone.”
GATES: Which do you think was the more important to the World Bank— seeing to it that you were kept out of the way by continued discrediting of your name? Or seeing to it that the developing countries were kept reliant on the World Bank?
Brink: There is no question about that in my mind. Any global power organization will seek to defend and to perpetuate itself at all costs, eliminating competitors and perceived threats to its continued domination.
It is not so much about me, per se. It is about the concepts I was advancing. In terms of the “Action Way Forward” that I presented to the G-77 CCI Monitoring Committee for the establishment of its own World Trade and Development Bank, I outlined how developing countries could go about wholly eradicating any need for continued reliance on the World Bank and the International Monetary Fund.
I suggested that the “Action Way Forward” document be kept completely confidential. I didn’t want to be in a position of the World Bank and IMF instantly moving to abort the baby before its birth, when it would have a chance to grow and develop on its own, as it should. Possibly the mere fact that I typed a bold-face “CONFIDENTIAL” on the document assured that it would be secretly passed to the very ones determined to keep developing countries in perpetual beggar status. I don’t know. Some things are difficult to know in advance.
GATES: Earlier we were talking about the allegations of the indictment brought against you by the U.S. Department of Justice. Let’s get back to that.
You were working us backward through the indictment. Forfeiture of the alleged Mbuya palace is predicated on the funds used to purchase that property being the proceeds of the crime and then money laundering that to affect the purchase. You explained that away by asking how is it that one ever needs to launder “clean” money, which you stated the bank’s funds were clean, based on the fact that the commercial banks that transmitted funds to your bank on behalf of your depositors were made to certify that they knew those remitters and were satisfied with the source of funds.
Brink: Correct.
GATES: So keep working us backward through the indictment, if you will.
Brink: Okay. The end results the prosecution wishes to achieve is to have the court order that the personal properties of the indicted parties be forfeited. Accordingly, the Justice Department alleges that I purchased the Mbuya “palace” with the proceeds of crime.
A really nice Mercedes was seized from another of my fellow associates. It was purchased with her personal savings, which the Justice Department concludes is also proceeds of crime. A nice home that was purchased by another one of the indictees is also named as subject to forfeiture, as are the personal savings accounts at a European bank that are owned by another indictee also is said to be the proceeds of crime and subject to forfeiture.
If it were not all taken so seriously and believed to be the Gospel truth by so many, I’d just yawn and go take my afternoon nap. It was not with the proceeds of crime that the bank purchased the Mbuya property. It is not, repeat, is not money laundering when a bank purchases assets according to the policy directives of its Board of Directors.
Receiving personal compensation for services rendered is not receiving the proceeds of crime. And it is not money laundering when an officer or director of a bank takes money earned as compensation for working at the bank and uses it as a down payment on a really nice house or as purchase funds for a really, really nice car. Sorry. It just isn’t.
It is a principle of both canon law and common law that “the workman is worthy of his hire.” How is it, then, that the U.S. Justice Department can think to say that it is a criminal act for someone to use his wages to buy a house or someone else to use her wages to buy a car? Or how is it a crime for yet another person to not buy anything at all, but to simply bank his wages in a savings account to provide for his own retirement?
GATES: I see your point. I guess we need to backtrack even further in the indictment, then.
Brink: And so we shall.
Each of the five indictees is charged with a single count of conspiracy. Conspiracy to do what? From what I’ve read, conspiracy to commit fraud and/or conspiracy to money launder the proceeds of crime and buy palaces, nice homes and really, really nice cars-- or to just create a retirement savings account or two.
Yet if the funds were certified clean in the beginning, how is it that they need a criminal conspiracy on how to money launder those funds effectively?
They don’t. Not unless the clean funds were illegally gotten in the first place.
GATES: Which means we must look back even further in the indictment.
Brink: You are following me. Thanks for letting me know. I tend to go on and on at times and some people are too polite to interrupt me and say that they are not tracking with me. If I lose you, please do interrupt.
GATES: You may count on that.
Brink: The other charges I remember reading in the news report were that of mail fraud and wire fraud -- two kinds of the ugly “f” word.
So assuming that the Justice Department can prove that Fidelity Bank and First Bank ever mailed anything at all or ever faxed anything at all, they have proven half of each charge. But mailing or faxing something is not an act of fraud unless the contents of the mailed and/or faxed item are grossly misleading and intended to defraud the recipient out of the recipient’s money or other property. In this case, it seems to be charges of attempting to defraud the recipients out of their clean money.
That was my first thinking when I read the news report. As I mentioned, a friend in the United States managed to get his hands on the complete indictment and send me a photocopy. Assuming it is an accurate photocopy of the actual indictment, I paged through it.
The numerous mail fraud charges are based on the fact that when the bank received a deposit in the form of a check from an American depositor, the bank had to send the check back for clearing in the United States. Now I don’t care if you are Barclays Bank, HSBC, Bank of Tokyo-Mitsubishi or Union Bank of Switzerland. If you receive a check drawn on an American bank, the only way you truly have of crediting the amount of that check as a deposit is to send the check back for clearing in the United States. Yes, Fidelity Bank had to do that. Yes, First Bank had to do that too.
The U.S. Justice Department takes the position that such constitutes mail fraud-- and one count of mail fraud for each time they care to list that you as a non-American banker sent a check back to the United States for clearing.
The wire fraud charges stem from the fact that, yes, the Fidelity Bank and First Bank both did cause funds to be transmitted by bank wire. Each count of wire fraud that I scanned over was related to this very thing. I think the U.S. Justice Department’s clerical staff was simply lazy and got bored with typing out the specifics of each and every wire that the bank ever transmitted to anyone, anywhere. Had they not been so darned lazy, I could stand charged with, I don’t know, maybe up to one million counts of wire fraud and by U.S. Justice Department standards, they are letting me off easy with me only being asked to face up to about 700 years in prison. If they were really angry, they could push the sentence up to five million years, maybe more. Maybe they understand something of how idiotic they truly are as it is.
Yes, I was CEO of banks that caused funds to be transmitted by bank wire. Fidelity Bank and First Bank were duly licensed banks, for gosh sakes. Banks cause funds to be transmitted by bank wire. Sorry, it just works out that way. Worldwide.
So, as I mentioned, it is quite easy for the prosecution to prove that both the mails (or other commercial carrier services) were used by the bank in processing deposit receipts and also wires happened to be transmitted by the bank for various purposes. That proves the “mail” and “wire” portions of the mail fraud and wire fraud charges. But that doesn’t prove any actual fraud occurred.
GATES: So the essential proof of all of the indictment’s allegations is for the Justice Department to prove that the indicted persons engaged in attempted fraud and did succeed in defrauding investors, hence anything ever purchased by them with their ill-gotten gains was also criminal acts that subject those accused ones to forfeiture.
Brink: That’s how I see it too.
GATES: So what do you suspect that the Justice Department might be basing its assertions of defrauding depositors upon?
Brink: This is a foregone conclusion. The prosecution’s case rests, principally, upon the allegations of its expert witness.
GATES: Who is…
Brink: My guess: Mr. Marcus A. Wide of PricewaterhouseCoopers, the Grenada court-appointed Liquidator given charge over liquidating First International Bank of Grenada Limited.
GATES: Why is Mr. Wide your guess as the prosecution’s expert witness against you and the others who were indicted?
Brink: Because of the statements he made in both his First and his Second reports as FIBG Liquidator. Reports that were publicly published on the PWC Global web site in 2001 and remain up there for all to see to this very day. And because of how eagerly he has worked with the U.S. Attorney’s office and the Federal Bureau of Investigation throughout this liquidation process. Even to the point of convincing the Grenada court to wholly abrogate Grenada’s own laws, assuming powers that it did not have, simply to give the U.S. Justice Department everything it asked for-- which was some 151 stacking boxes of file folders filled with every paper record of First Bank, aside from the bank’s printed stationery and brochures. By the way: this was in direct contravention of Grenada’s Offshore Banking Act and its promised banking privacy protections to foreign depositors who chose to bank at any of Grenada’s offshore banks.
GATES: Are you saying that the Grenada court acted without proper authority in the matter of the First Bank liquidation?
Brink: I am not an attorney, but my understanding is that Parliament enacts laws. The courts of a country are sworn to uphold and enforce the laws enacted by that nation’s Parliament. The United States equivalent to Grenada’s Parliament is Congress.
The relevant Grenada laws did specify that the Government could demand to see the deposit records of specific individual depositors, provided that there was a court order based on probable cause that such specifically-named depositors were involved in illegal activities, such as illegal drug trafficking, illegal arms trafficking and so forth.
But apart from that, depositor records were not to be turned over to third parties, including outside government agencies, without the specific, written-in-advance consent of the individual depositors involved.
I read the Grenada Offshore Banking act cover to cover many times while I was First Bank’s Chairman of the Board and Chief Executive Officer. In that one Order, the Grenada court removed Grenada from the status of being a nation governed by laws, rather than by men. What foreign investor can ever again rely on Grenada to even uphold its own laws? Grenada’s law was crystal clear on that topic. That’s my opinion, anyway.
GATES: I dare say that your opinion probably doesn’t go far in Grenada these days.
Brink: So it would seem. But no matter what, I still wish for Grenada and its people nothing but well. The pressures that were brought to bear on the Grenada government and court were, I’m sure, enormous. Put on an international “black list” with economic sanctions for not instantly bowing down and saying, “Yes, Massa. Yes, Massa…”
In the days of slavery in America, the slaves were not allowed to look their slave masters in the eyes when speaking. Nor were they allowed to refuse any order. It was demanded that they say “Yes, Master” to anything asked. The response was sort of blurred into a “Yes, Massa…”
Being demanded things by the IMF and other external political authorities is not an easy situation for a small developing country to be in. Grenada’s Prime Minister is an educated man holding a doctorate degree. A college professor by academic training. Not a revolutionary leader determined to go the distance on what he views is morally right, no matter what. My heart still goes out to Grenada’s Prime Minister.
GATES: Getting back to the question of why you think Mr. Wide will be the main expert witness of the U.S. Government against you and those others who were indicted, you said it was because of statements he had made in his first and second reports as Liquidator. What sort of statements?
Brink: Statements to the effect that in his opinion the bank was a fraud from the beginning, purposely engineered to defraud investors out of their money and for the personal enrichment of the bank’s primary operatives.
Statements like the bank’s self-insurance program administered by International Deposit Insurance Corporation was a complete sham, based as it was on assertions that the bank maintained asset backing of 3:1 on deposits during the days of Fidelity and 10:1 during the days of First Bank.
And statements to the effect that the bank’s large assets were completely bogus and that therefore, the bank was a fraud, the IDIC program was a sham, and the promoters of the bank are crooks and worthy candidates for criminal prosecution.
What makes these statements seem completely credible is that in every thing he has done, even to the writing of his Liquidator reports, Mr. Wide references his long-standing relationship as a Certified Public Accountant attached to and working with the world’s largest accounting firm, PricewaterhouseCoopers, as well as his years of experience as a professional liquidator.
GATES: I take it you disagree with his statements.
Brink: All but completely. He does spell my name and the bank’s name correctly. I’m guessing he probably spells his own name correctly, too. Beyond that…
GATES: So how do you ever counter the allegations that have been made in the indictment against you?
Brink: Three good people have already been arrested. Each will retain quality defense counsel. I have already filled the e-mail inboxes of those working with two of the three defendants with the ABCs of how the defense attorneys may demolish the government’s case.
The case of 140-plus counts all rises and falls on a preliminary point. Disprove the government’s preliminary point and the entire case must be dismissed against one and all.
GATES: If it doesn’t compromise your case, would you mind telling me how you would go about “demolishing,” as you say, the government’s case against you and the others?
Brink: It is quite simple, really.
The government’s case relies on its expert witness and his assertions that the bank was a fraud, IDIC was a sham, and that there were no major assets that were genuine.
Boil it down even more. If the bank did have major assets that were genuine, then IDIC was not a sham.
GATES: Nor could the bank, then, be considered a fraud.
Brink: You win the cigar!
The key, then, is to demonstrate the credibility of one or more of the bank’s large assets. Do that and you more than create “reasonable doubt”; you demonstrate with certainty that the published reports of Mr. Wide were erroneous.
At that point, the only question would seem be on whether Mr. Wide’s sweeping proclamations were due to his utter professional incompetence or because of an “agenda” which he was dispatched to accomplish or simply because of his own arrogance, greed and consequent maliciousness.
Which answer is least embarrassing to the U.S. Justice Department? That their supposed expert is easily proven to be utterly incompetent? That their alleged expert was actually someone engaged in a conspiracy of massive criminal fraud-- and engaged in that conspiracy with the U.S. Justice Department itself? Or that, yes, a heinous crime was committed, but after more than five years of intensive investigations, the U.S. Justice Department indicted the wrong parties?
GATES: This gets back, then, to your remarks about the reason for the years of published allegations against both you and the bank possibly having been a deliberate smear and destroy campaign.
Brink: It does more than that. Conspicuously not indicted by the U.S. Justice Department is former bank director Richard Downes, who later also served as Chairman of the Board of Directors; and Mark Kennedy, who succeeded me as Chairman of the Board of Directors and as Chief Executive Officer of the bank.
The bank also compensated both. Both were compensated at the same times as were Van Brink, Rita Regale, Robert Skirving, Larry Barnabe and Douglas Ferguson. It begs the question that if the compensation paid Regale, Skirving and Barnabe constituted the proceeds of crime for which criminal charges were filed by the U.S. Justice Department, why then was not the compensation paid to Downes and Kennedy not also so declared?
GATES: I am assuming you have a good answer to that question.
Brink: Yes, I do.
GATES: Let’s hear it, then, if you don’t mind.
Brink: Your belief in the American justice system may not survive the answer. Ditto your belief that I am a stark, raving lunatic on the loose with paranoid delusions about having been designated a threat to the National Security Interests of the United States to be brought to humiliation and ruin at all costs.
GATES: I will do my best to survive such bitter disappointments.
Brink: Careful, now. Your sense of sarcastic humor is showing again.
GATES: I have been indicted on that charge before. How about telling me your answer?
Brink: Okay, the question is this: If Regale, Skirving and Barnabe were indicted for spending or saving their personal earnings, as they pleased, why were not Downes and Kennedy similarly indicted?
And the answer is that it seems there were three federal grand jury panels that deliberated on this case. Both Downes and Kennedy were called to appear before the first and/or second grand jury panels. And before that first and/or grand jury panel both Downes and Kennedy separately provided key evidence.
GATES: Evidence of what?
Brink: Evidence that the bank’s asset structure was quite real.
Upon receiving that evidence before the first and second federal grand jury panels, the Assistant United States Attorney thanked them both for appearing and then sent them home.
GATES: Politeness always seems so difficult for your Americans to abide.
Brink: I am sure I speak for all Americans in thanking you for sharing that observation.
GATES: You were saying that former bank directors Downes and Kennedy presented evidence that the bank’s assets were real. Are you suggesting that this is why they were not also indicted?
Brink: You are forgetting the third federal grand jury panel.
GATES: So I did.
Brink: After the first and second panels heard the evidence as to the reality of the bank’s asset structure, those grand jury panels were dissolved and a new federal grand jury panel was constituted. Neither Richard Downes nor Mark Kennedy was called to appear before the third federal grand jury panel. And by this third grand jury panel the now-revealed indictment against the five of us was issued. It appears that neither Richard nor Mark was even mentioned to this third grand jury panel.
GATES: You are suggesting, then, that it was by careless, reckless, even malicious disregard for the facts that you and the other four have been indicted?
Brink: There is no doubt of that in my mind.
Of course it could be that Marcus Wide genuinely believes in his erroneous conclusions and is of pure heart and clean hands in this matter. I don’t rush to judge and condemn the man. It is possible for honest men to make mistakes and errors in judgment in the press of day-to-day matters. I quite concede that as a possibility. He has not published an additional report in over two years and we’ve not seen his final report as Liquidator. Who knows what he thinks at this point? Possibly during all of this intervening time he has been able to more carefully research matters and see that some of his earlier statements were in error and ill-advised.
Moreover, it could be that Assistant United States Attorney Claire Fay and the FBI might be able to honestly say that they were just following orders or that they actually do believe in the reasonableness and righteous correctness of their positions and of the positions taken in the Indictment, even though it took them five years and three grand jury panels to get the indictment that is now revealed. And, certainly, I have no criticism for a Grand Jury panel that wasn’t presented with all of the facts.
GATES: But if what you have told me is true, it certainly begs questions of all of them and what their motives truly are.
Brink: Yes, it does. What I have told you is true.
GATES: For how sure of yourself and your facts, as it seems, why aren’t you on the next jet to the United States to set the records straight?
Brink: Because a crime was committed against the bank’s depositors. My volunteering for incarceration until such time as the wheels of American justice can sort this matter out leaves the depositors hanging.
GATES: How does your remaining free in Uganda change any of that?
Brink: The ‘how’ is what I have been working on since January 12, 2001 and is now almost completed.
GATES: Which is?
Brink: Rounding up new assets large enough to produce income streams capable of providing gifts to former depositors in amounts greater than what they had invested that was lost through no fault of theirs. I have also been organizing a team of individuals situated globally to handle the business placements of these assets to produce income and also to accomplish all gift processing and distributions.
GATES: My, you are an American cowboy, aren’t you? You’ve been out on a “round up” looking for large assets.
Brink: I guess that is humorous. I did actually participate in a real, horse-riding, open range cattle round up in Eastern Washington state one year for a couple weeks in my early teens. I wasn’t aware that I tend to talk in cowboy terms.
GATES: Not a problem. But do you have any sort of evidence of these new large assets and can you show me any proof of these large assets you say you’ve been “rounding up?”
Brink: Of course I have evidence of the assets. But, no, I won’t show you any proof. For obvious security reasons I have none of those documentary items here in Uganda. I have entrusted custody of those items to others on the team who are positioned globally.
We are keenly aware that we have enemies to this project that do not wish to see Van Brink in any way succeed. These same adversaries who consider me a threat to America’s National Security Interests seem to believe that they are best served if not only do I fail, but that it can be demonstrated in court that I’ve left a wake of over $200 million worth of financial wreckage and shattered lives along the way. It would take the wind out of their sails if everyone received back more than they ever deposited.
The truly uncomfortable thing is that even with the allegation of me having defrauded investors of over $200 million, it presents security risks to me. People tend to think that I’m sitting on millions and millions, when I am not. Puts me at risk, personally, and my wife at personal risk too. Risk of kidnapping and extortion. Risk of home burglaries or highway robberies. Those sorts of things. I’d have to be an idiot to have these newly developed title deeds, share certificates, bonds and so forth with me or even to have bank accounts in my name. I’m not an idiot. And I don’t have such items in my possession. Period.
GATES: Okay, I see your point on that. Still, all of this does stretch credibility beyond the limits. You say have been working since 2001 to figure out how to provide restitution that you say you don’t owe to thousands of former depositors. The US government states that amount to be more than $206 million, charging you defrauded investors of that amount. You deny the charge, but seek to accomplish restitution on the full amount anyway? Why would any rational man attempt to do such a thing? I’ve never heard of it in my entire life.
Brink: If the answer isn’t obvious, I really don’t know what to say. Hmmm…
What was lost was the life’s savings of my family and friends, of their families and friends and of the families and friends of friends of friends and so forth out into an ever-widening circle of depositors that spanned the globe. These are good people who were wiped out. That’s the reason I’m working on this. If I don’t, who will?
And the reason why I don’t jump at the chance to fly to America to sort all of this out is also obvious. Me taking up to a year or more out to go sit in a prison cell waiting for the chance of my defense attorney setting the record straight leaves my family and friends waiting just that much longer. They have waited long enough. I’m not stopping. I will finish this. All depositors will be more than fully restored. Period.
GATES: Meanwhile, three of your former associates have already been arrested and are waiting in those prison cells.
Brink: Would it seriously make any difference to them and their families for me to be occupying a nearby cell? I can do more for them and their families while finishing up what I call the Restoration Project by my remaining in Uganda than I can by joining them where they are in America.
I don’t know if you’ve ever spent much time reading the Bible. In the Old Testament there is a book named Nehemiah, starring Nehemiah, of course. According to that Old Testament book, God sent Nehemiah to rebuild the demolished wall around the City of Jerusalem. He had his adversaries and critics. He had enemies who wanted to just do him in. They didn’t want to see the wall around Jerusalem re-built at all. And so they would send messengers asking Nehemiah to come join them for a meeting to work things out. Or they would stand outside the wall he was rebuilding and taunt him; daring him to come down and face them like a man, if he was so certain he was right in what he was doing.
Nehemiah refused to lose his focus. His replies were always the same. The work he was doing was too important to allow him to be so foolishly distracted with senseless meetings and encounters with his adversaries and critics.
I feel the same way. The work I am doing is too important for me to waste time in the United States arguing with those who don’t want to be persuaded by facts and truth, but who have dedicated their lives to the express purpose of finishing my humiliation and ruin, no matter what it takes in diverting, perverting and subverting facts and defeating justice.
Quite by seeming accident I came to Uganda and on what initially proved to be a pointless mission as relates to Co-Operative Bank. One thing led to another and I stayed, not knowing at the time that the United States did not have an extradition treaty established with Uganda. Happy coincidence? Or a situation in which an Unseen Hand guided along the way? You pick it as seems right to you. I know how I now feel about it. It was for such a time as this that I was brought here.
GATES: In one of the reports I read of your indictment it mentioned that you paid $700,000 for a fleet of 30 Jeep Cherokees to be shipped to Uganda.
Brink: Yes. It is yet another instance of taking facts completely out of context to try to make me look quite the scoundrel.
I mentioned that when I first came to Kampala on the Co-Operative Bank matter there were some delays before we actually presented a proposal to the Governor of Bank of Uganda. During those delays I was introduced to many people, once of whom is Willy Mishiki, a Congolese of Goma, DRC.
Willy and I spent an afternoon talking, he having heard that I was the CEO of a bank interested in making investments in Africa and hoping that I would be open-minded enough to consider helping him start some projects in DRC in addition to the ones that had attracted me to Uganda.
As I asked about the available roadway, electrical power, telecommunications and banking infrastructure in Congo, he just looked at me in amazement and tried to explain the heart-breaking poverty and total lack of development in what happens to be one of the richest countries on earth in terms of natural resource potentials.
I had difficulty comprehending what he was saying and had him back up and tell me about the history of Congo for the past couple hundred years and what went wrong with natural economic evolution in the 1900s.
He took me back to the days when a King Leopold of Belgium considered all of Congo to be his personal plantation. In those days rubber, not oil was the global economic king of commodities. Able-bodied Congolese men were invited to spend their days working in Leopold’s rubber plantations. Those who refused to do so were allowed to refuse such labors. They also had both hands chopped off at the wrists. If they wouldn’t work for King Leopold, they wouldn’t work at all.
When he told me this, tears filled my eyes. Perhaps the neo-colonial master nations of today no longer literally chop off a man’s hands at the wrists, but it seemed to me that in this age of enlightenment, the economic bullying of the neo-colonial nations has simply become more sophisticated. If you don’t scrape and bow as a proper African-American slave, saying, “Yes, Massa. Yes, Massa…” your entire developing country will have its economic hands chopped off through “black listing” and economic sanctions imposed by the hypocritical “have” nations that keep trying to convince the “have not” nations that their true desire is to help them become a “have” nation too. Bull manure.
Anyway, I was deeply moved by what Willy told me about his people’s history. He worked his way up to the 20th century and to national independence from Belgium in the early 1960s, he recounted how that no one in the Congolese armed forces had ever served at a rank above Sergeant Major. It wasn’t allowed. Higher education had been virtually outlawed for the Congolese people, too, and at their independence day, only two Congolese held a college degree. Bear in mind that Democratic Republic of Congo is a nation the size of Western Europe or of the continental United States west of the Mississippi River. Big, big country. Millions upon millions of people. Only two had college education when Belgium granted independence to the country. Only two!
Then the Mobuto years where billions and billions of dollars in American foreign aid poured in to keep Mobuto in the American camp in the years of the Cold War between the U.S. and the Soviet Union. Billions of dollars of aid that didn’t flow to the Congolese people but disappeared into Mobuto’s regime. Then the civil war that brought Laurent Kabila to power, followed quickly by another civil war trying to unseat Laurent Kabila.
This was June of 1999. The second Congolese civil war was then about one year old.
At the time I met Willy, he was affiliated with Professor Wamba dia Wamba’s RCD-Kisangani rebel movement. I asked him why the Congolese didn’t just all get together and work out a way to live in peace so that they could get to developing their national economy. There was more than enough natural resource wealth to go around. Quit killing each other and blowing things up and start working with each other for the mutual benefit of all.
He said that if I would write such a plan on how peace could be achieved and economic development could begin, he would quit Wamba’s group. He knew the leaders of each warring faction, including Ministers high in Kabila’s government. If I would write the plan, he would see that it was presented to the right people and adopted. He assured me that he had the personal connections throughout the country to do that. But he needed an economic plan to present.
Where to begin?
I began by considering the foundation for a nation’s economic development and situation within the global community of nations. There needs to be a sound currency and a banking system that works.
I quizzed Willy on the current national currency of DRC and learned that it had two currencies. The one from the previous government that was officially worthless but still widely used for lack of anything else. And the new currency that was virtually printed anytime the government or a favorite general wanted to pay people or purchase anything locally, a currency that was worthless in international trade.
With that introduction I went to work outlining an economic plan for the revitalization of DRC. That is how the Union Reserve System was born.
True to his word, when I finished writing the basic plan, Willy read it, asked if I actually could arrange for initial asset backing of $10 billion in financial instruments. I assured him that I could. He set up a series of meetings with Wamba dia Wamba and his closest advisors. After a few weeks, in August 1999, I believe, the first treaty with one of the Congolese rebel factions was signed on behalf of RCD-Kisangani, First Bank as funds/asset provider and the URS as funds administrator.
I then had to leave for a couple weeks worth of meetings in the Philippines. I returned briefly to coordinate some details in Uganda on behalf of the First Bank, then flew to Grenada to prepare for the Board of Directors meeting at which I announced my resignation as Chairman, as a bank Director and as the bank’s CEO. I wanted to devote my full-time attentions to the Union Reserve System. I resigned from First Bank on October 1st. Mark Kennedy became my successor. I notified the staff and affiliated companies, along with Grenada’s Minister of Finance and its Prime Minister.
Wamba sent a delegation to Grenada to work on outlining what humanitarian projects they wished to see undertaken by the URS in their sector of DRC. That was signed in November. A day or two after that signing I flew back to Uganda. I came down sick on the plane flight. Dr. Ian Clarke diagnosed it in Kamala as dengue fever, probably contracted from an insect bite in Grenada. He told me that Grenada was the international headquarters for dengue fever research. He recommended I return to Grenada, so I did. A truly horrible sickness. About 90% of my body was covered in a rash, I had a high fever, could hardly move and was losing motor functions in my right hand. By the time I arrived back in Grenada, I was virtually paralyzed on the right side of my body.
I was touch-and-go for a while, but recovered sufficiently by January to host in Grenada a meeting Willy orchestrated on the Congolese end of things. The meeting was a small convention, featuring a delegation from the RCD-Goma faction rebel movement (the second of three primary DRC rebel movements at the time), a delegation from the Congolese civil society called Movement for Security, Peace and Development, and a delegation of Congolese kings from the 50 kingdoms of DRC. We had to charter an entire Boeing 707 to fly them to Grenada, where they pretty much took over an entire beachfront hotel for a week. This was in early-January, 2000.
Three new treaties were negotiated. Two of those treaties were signed. The signing of the third treaty was delayed until I could return to Uganda and arrange to fly to meet the President of the RCD-Goma faction. One of the two treaties that were signed in Grenada was with the Congolese kings group. Part of that treaty was in the first year to provide them with a fleet of Jeeps so that they could spread the word and help coordinate the humanitarian projects of the URS on the ground throughout DRC.
Did I spend $700,000 on a fleet of 30 Jeep Cherokees to import to Uganda? In a manner of speaking, yes. I authorized the ordering of them as a first step toward implementing what were then three signed treaties for humanitarian aid. First Bank advanced the down payment for the Jeeps. It was part of a treaty signed by Mark Kennedy on behalf of First Bank, by myself on behalf of URS and by representatives of the Congolese kings. There was no shipping company we could find that would deliver the Jeeps into a war zone. They were to be delivered to Kampala, whereupon we would caravan the Jeeps to DRC.
Was I raping the bank for personal gain? No. I had resigned from the bank October 1, 1999. Mark Kennedy was Chairman and CEO of the bank. I asked him before we signed each and every treaty if the bank’s cash position was such that it could afford to enter into the treaties. He assured me that the bank would handle its part and that it would not present a problem to the bank nor would it put the bank’s obligations to depositors at any risk.
GATES: So what happened? What brought about the bank’s collapse?
Brink: That is a long story and I’m not sure that I know all of it. Contrary to the assertions of the U.S. Justice Department, I did not remain in control of the bank. So I simply don’t have all the facts on what all happened after I left. I’m not sure I ever will.
One of the things that can be done to destroy a bank is to keep up negative press coverage to the point that a run on the bank by depositors occurs, wiping out its cash reserves and pushing it into default on its depositor obligations. It then snowballs until the bank is forced into closure and liquidation, if it can’t mobilize its non-cash assets quickly enough.
That, in essence, is what happened at First Bank. There are some twists and turns in the story with other characters misleading the bank on remedial steps to take that proved to make worse the situation that was developing in February and March and snowballed into a bank run in April and May.
Mark Kennedy resigned at the end of May. Richard Downes became Chairman of the Board and a British Barrister named Lawrence Jones became Acting CEO for the bank.
I was called back to consult with the Board on how to pull the proverbial fat out of the fire and flew to Malaysia in June to negotiate with a large asset holder, both on behalf of the G-77 World Trade and Development Bank initiative and assisting Richard [Downes] in separate negotiations related to that bank. I then spent the bulk of July and August in the UK, assisting Bob Skirving in negotiating income-producing asset placements to give First Bank the snap of some serious income that would have brought it current on all obligations within less than 30 days.
GATES: And were you, Downes and Skirving successful in those separate efforts?
Brink: Very much so.
In Malaysia Richard Downes and I successfully negotiated an injection of $120 million in additional bank share capital in the form of a Certificate of Deposit issued by a large world bank. We also had the bank approved for $22 billion in economic development funds to be released to its care over the following year.
In the UK Robert Skirving and I negotiated the placement of an asset independently valued at $855 million, insured for that amount by a ranked and S&P-rated insurance company and confirmed bank-to-bank by Barclays Bank, Brazil. On just about the very day we concluded that negotiation, the Government of Grenada moved to seize the bank’s operations. That was August 11, 2000.
GATES: So after all of that, why was the bank forced into involuntary liquidation?
Brink: Once the Government of Grenada seized upon the bank, no one on our team had authority to sign any deal on behalf of the bank, including a deal that would generate immediate income to the bank. All had to pass through the Government’s appointed administrator for the bank, a Mr. Garvey Louison. All that was needed in respect to the $855 million placement was for him to confirm that the asset did belong to the bank and also that the bank committed the asset to that income-producing placement. That and confirming to what wire coordinates the bank wished its income to be sent.
In the first respect Louison held in his hands the confirmation from Barclays Bank/Brazil that the $855 million asset had been transferred to First Bank’s ownership. Beyond that, he needed to complete the documentation authorizing the asset’s placement and providing wiring coordinates. That’s it. Less than a month’s worth of weekly income from that placement would have cleared all arrears to depositors. From that point on the bank would have been in significant positive weekly net-profit income. All obligations to all depositors could have been paid out in full within three months, if that is what depositors wanted, leaving with bank with no depositors at all, just massive, pure income from then on until the proverbial cows all came home.
GATES: So why didn’t Mr. Louison do those things?
Brink: I don’t know. From what I could tell, he busied himself seizing various used Jeeps in Grenada and writing letters accusing me and other former bank operatives of various possibly criminal acts of negligence and personal enrichment at the expense of depositors. He didn’t seem at all interested in a financial solution. He seemed dedicated only to bloodletting and malicious accusations. Since then he has offered himself as a bank liquidator to assist in Grenada’s court-ordered liquidations of other Grenada offshore banks and is so engaged. I don’t believe that any Grenada offshore bank has survived.
GATES: From what I’ve read the Grenada government replaced Mr. Louison with another interim administrator in the fall of 2000. I take it that you and/or others were not successful in having him revive the deal on the $855 million asset placement, either.
Brink: You’ve done your homework. At a press conference in the fall of 2000, the Grenada Minister of Finance congratulated and thanked Garvey Louison for a job well done and then announced that Mr. Errol Thomas would be replacing Louison as Interim Statutory Administrator for the bank. Thomas was a former Attorney General of Grenada, a man of spotless personal reputation in that country.
Simultaneously, the Minister announced that a Canadian office of PricewaterhouseCoopers had been awarded a contract to advise the Grenada International Financial Services Authority on how to clean up Grenada’s offshore sector and also that the first assignment to PWC was to conduct a forensic audit on First Bank. This was the entry point of Marcus Wide into the process, as he was the Managing Partner of the Canadian PWC office that was retained as consultant to GIFSA and, separately, as forensic auditors of FIBG.
With Wide/PWC looking over his shoulders, Thomas did nothing to revive the deal on the $855 million. Further, a deal that the bank had been working on since 1999 involving the placement of $500 million in First Bank guarantees came to fruition in November. The bank was offered $1.1 billion a year in income for five years, if it would simply confirm that the bank had, indeed, written the guarantees and also confirm to what wire coordinates it wished the weekly income stream on $1.1 billion over a 40-week year to be sent. And this at a time when the total arrears to depositors was not more than $50 million. Weekly income on the $1.1 billion would have been something like $25 million. I don’t have my calculator handy at the moment.
Thomas sat on that offer, not replying in any way. The offer expired. Only then did Thomas reveal in a telephone conversation with Richard Downes that the reason he didn’t respond timely to the offer is that he had not received permission to do so from the Grenada Minister of Finance.
Upon hearing that, I strongly encouraged Richard to renegotiate the offer. He did so, on the same original terms. Meanwhile, through a mutual friend of both the Minister’s and mine, I was successful in having the Minister give his specific approval to going ahead with that transaction. So when it was presented again, we were shocked when Thomas, again, did nothing about it. He did, however, on January 12, 2001, present the Minister’s petition to the Grenada High Court of Justice that First Bank be ordered into involuntary liquidation and requesting that the bank’s forensic auditors, PricewaterhouseCoopers, be named as the bank’s Liquidator.
When queried on why he didn’t just go ahead with the telex confirmation necessary to start receiving $1.1 billion in income to the bank, Thomas explained that all employees who knew how to operate the bank’s telex machine had been let go and there was no one available to transmit the necessary confirmation and wiring instructions.
GATES: Which brings into question what possible influence in this PricewaterhouseCoopers, Marcus Wide and unknown others may have had in persuading Thomas or the Minister of Finance not to allow problem-solving income streams to flow into the bank.
Brink: Indeed it does. Indeed it does.
GATES: In my mind it also begs another question. Why didn’t First Bank just do a voluntary liquidation? In a voluntary liquidation the bank could have gone ahead with both of those income generating scenarios, first the one on the $855 million, then the one of $1.1 billion in offered annual income. Why wait to be forced into an involuntary liquidation where your hands are tied and everyone is at the mercy of a Liquidator who is self-interested in receiving 50% or more of liquidation proceeds?
Brink: Matter of fact we pleaded with the Minister of Finance to allow us to perform a voluntary liquidation. He wouldn’t have it. We even arranged for our voluntary liquidator to charge no more than 15% of liquidation proceeds.
GATES: Backing up a few steps, why didn’t First Bank’s self-insurance administrator, International Deposit Insurance Corporation, step in under its contract and take over the bank’s administration so that the interests of the depositors could have been preserved? I’ve read the contract between First Bank and IDIC. It seems to me that IDIC would have had full authority to proceed with those income- producing propositions so that depositors could have received all.
Brink: IDIC tried to do exactly that.
When Louison wouldn’t go forward with the $855 million placement, IDIC wrote to Louison for the asset to be turned over to IDIC so that IDIC could perform its contracted role. Louison refused to even respond to IDIC on that topic. Instead, he sent me a scathing letter that he had not been appointed by the Minister of Finance to abide insults from my personal friends, like Doug Ferguson.
GATES: Ferguson being IDIC’s Executive Director.
Brink: Correct.
Later, IDIC even presented a petition to the Grenada court fully documenting its legal right to take over the bank’s administration or to liquidate the bank entirely. The court acknowledged receipt of the item, and then removed it from its records by sending it to Thomas, whereupon Thomas did nothing with it other than rush to court with the petition that the bank be put into involuntary liquidation at the hands of PricewaterhouseCoopers.
GATES: Which, again, begs the question on what role PricewaterhouseCoopers and Marcus Wide may have played in seeing to it that the bank and its depositors were not financially rescued.
Brink: It does beg that question, doesn’t it?
GATES: One more question arises in my mind. Since placing these assets to produce income was, according to what you have said, something that could be accomplished, why didn’t you do several such placements before you resigned from the bank so that the bank would have plenty of income during its transition phase following your resignation as bank Chairman and CEO?
Brink: I’ve asked myself the same question so many times. Why, oh why didn’t I just personally see to more than ample placements of assets being done before I resigned?
Have you ever wanted to go back to a moment in time and just change one decision? I have made many, many decisions. Some turned out perfect. Some didn’t. If I could change just one decision in my entire life, that would be that one.
At any given moment in time, it is difficult to see what will be the end result of decisions you are making. Making such asset placements involves weeks and sometimes months of dedicated effort. Bob Skirving and I spent most of July and about half of August 2000 in the UK working on arranging placement for one or more of the bank’s assets. During that time we succeeded in arranging for the placement of the one $855 million asset. It is tedious work involving meetings upon meetings and frustrating waiting periods in-between the meetings.
As I’m sure other executives also tend to do, I tend to personally handle those aspects of a given project that give me joy in the doing and look for others to whom I may reasonably delegate the administration of those functional processes that must also be accomplished.
I did a lot of delegating of authority and responsibility, when I should have buckled down and assumed personal responsibility that many assets were successfully placed. I kept allowing myself to be consumed by other functions that more suited my individual personality and nature. Take, for instance, the three-day trip to Uganda and quickly becoming sidetracked on the development and implementation of the Union Reserve System. The URS was infinitely more thrilling to me as a life-long student of economics than was managing and personally acting in the asset placement processes.
GATES: And if you had it to do over again?
Brink: That reminds me of a question posed by American comedian George Carlin. “What if there were no hypothetical questions?”
There is no doubt that if I could do it over now, based on my previous experiences, I would do many things differently. But that’s the thing, isn’t it? At the time of your first full cycle of experiences, you don’t have the benefit yet of those experiences. You are taking it a decision at a time, a day at a time. While you may be intellectually capable, even academically trained, you are not yet experientially equipped. It is through lessons learned in life’s “School of Hard Knocks” that one becomes truly equipped to handle challenging situations with seeming grace and ease. I’ve been through that school as relates to private bank administration.
GATES: Do you regret your decision to have Mark Kennedy be your successor as Chairman of the Board and Chief Executive Officer at First Bank?
Brink: There were some dark times. In dark times you can’t help but look around for someone to blame. Mark was a handy enough target. And at that time I did say that I regretted my decision to recommend him for all of my official titles, offices and powers at the bank.
But looking back, I do believe he was the right candidate for the job. I had found him intelligent, competent, and efficient and a true pleasure to work with. But it’s not easy stepping into the shoes of another in the best of circumstances. The local and international media feeding frenzy occurring at First Bank made it far less than the best of times.
Today, if I were looking for one man who could put together and operate a successful private banking operation, I really would choose Mark all over again. I did make the best decision possible in those circumstances. It was the circumstances that were externally arranged to be quite impossible, no matter how perfect any internal decision-making happened to be.
GATES: So would you ever go back to private banking?
Brink: No matter how experientially qualified for it I now am, I would never be allowed to go back into private banking. I am not “a fit and proper person,” you see. That is not an option.
GATES: And so what is next for you?
Brink: It starts with completing the Restoration Project for the bank’s former depositors. I cannot leave that undone. There is no “next” for me until then.
GATES: But even with that accomplished, you still have the indictment of the U.S. Justice Department hanging over your head. Can anything at all truly be next until that is fully addressed?
Brink: I lived my first 46 years without ever stepping foot outside the United States, but for one tour bus ride across the California border into Mexico for an afternoon and evening and maybe a half-dozen short trips across the border between Washington state and British Columbia, Canada. For me up through that time there was no relevant world outside of the United States.
Since then my eyes have been opened. There is a whole world out here that isn’t the United States.
Why is it that we allow ourselves to entertain the notion that the sun rises and sets with the United States?
Is it because the US is the only remaining, globally capable, military superpower?
There is more to life than military muscle. And even the military muscle of the United States has its limits, based upon what the American people are willing to endure of their sons and daughters being sent on military exploits to small countries like Afghanistan and Iraq. What if there were a dozen Afghanistans and Iraqs? How long would the American people endure a President so devoted to preserving the supposed national security interests of the United States by waging wars on small Arab countries that do not pose a military threat to the United States at all, but to which the president chooses to send American jets to bomb them back into the stone age and American soldiers to fight and die?
Last I heard there happens to be something like 200 member nations in the United Nations. As a small American boy I couldn’t imagine any nation not wanting to become a state in the United States. But is such American child-like thinking truly what we want the world to become?
A Union of African States certainly is an idea whose time has come, even as the nation states of Europe have largely moved into the European Union arrangement.
The United States happens to be the largest consumer marketplace on the planet. For decades the US dollar has been king in global economics. But with the emergence of the European Union, that predominance has been challenged and a balancing is now occurring.
Each year the American government and the Federal Reserve System have to figure out how to balance the American trade deficit. The U.S. economy may be huge, but there are limits to how much it can continue to import in relationship to its ever-weakening power as a value-added exporting economy.
This is what makes developing countries such as Uganda actually feared by the developed nations. If any developing country ever truly understands and grasps and sets about to exploit its own economic advantages, then it has hope of eradicating national poverty and emerging, finally, as a developed “have” nation in the global community.
I was delighted to read the Uganda Cabinet Minister of Finance’s last budget speech to Parliament, for instance. It seems to me that key people in the Ugandan government are beginning to understand and grasp the keys to economic development. Moreover, the Government has actually done something about it by charting the way for attracting foreign investment capital to Uganda so that the nation’s industrial sector may more fully develop.
Value-added exports are the key. So long as a developing country remains locked into simply exporting unprocessed commodities, it will remain a neo-colonial slave state to developed countries and it will be looted of more and more of its wealth with each passing year.
What is “next” for me is to be able to get back full time to focusing on ways and systems by which developing countries, particularly those in Central and East Africa, may begin their emergence as economic power nations. Forget focusing on military might. The real fight, globally, is the battle for positive national economies. All of the rest of the nonsense is diversionary.
GATES: And this is how you also view the indictment that stands against you in the United States?
Brink: Absolutely. I am not the criminal mastermind of gigantic banking fraud. I was, Fidelity Bank and First Bank were, the Union Reserve System was and so also the G-77 World Trade and Development Bank project was perceived as economic threats to be eliminated.
The strategy employed to eliminate these threats has been the continual use of diversionary tactics. The indictment unveiled against me just continues the diversionary excitement. Nothing more.
I am tired of having my time and energies diverted. I see what needs to be done. I know in what ways I can be helpful in getting it done. And none of that requires me ever having to step foot in the United States again. I grew up in America being proud to be American. I wish my American family and friends well. I love them dearly and would love to be able to visit them again. But there is a whole lot more to the world than the USA. I am a non-criminal, non-terrorist, peace-loving and productive citizen of the world now living and residing in Uganda.
Bearing no grudges and seeking no vengeance, I am attending to the full financial restoration of former bank depositors. My life goes on and I will not be diverted from the true battle to help the economies of developing countries emerge into their rightful places under the sun of their national abundances.
What more is there than that? To me there is nothing more important than seeing the economic captives of the world set free to pursue and achieve their full potentials.
GATES: Back to your belief, which you say you confirmed through three American intelligence sources, that you and First Bank were “taken” down because you were viewed as a threat to the National Security Interests of the United States.
Brink: Okay.
GATES: I may be submitting this interview for publication by the Internet journal called Offshore Informant. A year or so ago its editor, Mr. Paul Collin, published a lengthy article called Global Economic Brinkmanship in which he charted the development of Private Military Companies/Contractors, private organizations, that are often hired to do covert ops in the private sector. Are you familiar with that piece?
Brink: Yes. A lot of detail in there about things concerning which I was not aware. What references he made to First Bank concerning which I did have first-hand information were shockingly well researched on his part. I was flabbergasted when he contacted me by e-mail, set forth his research and asked for my comment. Flabbergasted on three counts.
First, that he had put together so much detail-- names, dates, and events-- on matters concerning which to my knowledge no one had ever made any public statements or revelations. At that time his web site was called AnExCIA or X-CIA Files, I believe.
I’ve been interviewed by reporters before, each claiming that they just wanted to present a balanced story, yet each publishing just another “trash and bash” piece in the end, full of the same sort of nonsense that has typified the coverage of me and the bank in the press since a Mr. David Marchant in his Internet journal Offshore Alert, just a couple weeks after I attended the Barbados Global Forum: Offshore Financial Services, in late November 1998, began his relentless campaign to ruin me and the bank. Yet Collin seemed genuinely interested in the facts and to let the proverbial chips fall where they may. That was shocking to me.
Second, in those matters where he did have the rendition of facts slightly distorted, he said he would correct his piece, if I would provide him what I regarded as the truth and two or three ways that he could independently confirm such matters. I tested him on that. To my amazement, Collin did.
Third, he told me things—complete with names and dates—that I had completely forgotten, yet instantly recognized as true. Where did he get all of that information? I haven’t a clue. But it does give me the suspicion that while Collin may be an ex-operative for the CIA, his intelligence gathering resources still seem to be intact.
GATES: My reason for bringing this up is that in coming across that article since our last interview session, it seems to me you glossed over some of the significant aspects of why you may have become to be regarded as a threat to national security interests.
Brink: Yeah, maybe so. But to get into it all just makes the whole story more and more unbelievable. I’d never believe it, if I hadn’t lived it personally.
GATES: Well, let’s have it, then. Let readers decide for themselves. What do you have to lose?
Brink: Point well taken.
Okay, without getting into and reviewing all of what Collin uncovered and pieced together, let me get back to where I was and what the Fidelity Bank and First Bank did and then offer a couple additional points of perspective.
Fidelity and First Bank experienced something of an exponential growth curve, both in the number of depositors being served and the total volume of deposits undertaken. As I pointed out, that in itself would be perceived as a threat to American banking interests. Bankers can do basic math and make projections into the future.
GATES: But American bankers don’t set Executive policy in the United States?
Brink: Oh? The Federal Reserve is the American banking system and Congress is continually consulting its Chairman, but cannot order him to do anything at all. Neither can America’s President. The American Banking Association’s lobby in Washington D.C. is one of the most well funded special interest group forces in American politics today. They wield amazing power and influence in Washington D.C.
But, technically, you are correct. And it is a simplistic approach to attribute the entire Executive Action policy agenda developed (that included the targeting of Van Brink and First Bank) to simply the banker’s lobby or perhaps even the Federal Reserve. You have to look at socio-economic implications, taxation issues and what is going on in the global economic wars for currency supremacy too.
Through the past several decades America’s immigration policies have been turned increasingly against allowing in “the tired, the poor, and the huddled masses yearning to breathe free.” The days when huge ships full of immigrants were welcomed into New York Harbor are long gone. For the past several decades the emphasis has been on the U.S. Coast Guard and the U.S. Border Patrol turning back would-be immigrants by the dozens, hundreds and thousands.
GATES: Socio-economic policy?
Brink: Yes. The view has been that immigrants displace Americans in the employment markets. They come from countries where even minimum wage is regarded as high pay and are, therefore, quite willing to snatch up menial labor job openings for even less than minimum wage, thus highly competing with and quite often displacing Americans in the low-level job market.
GATES: In what way could you and the bank possibly been perceived as exacerbating that problem?
Brink: To see this you have to look at what was happening in the immediate and short term and then extend it to the medium term of a decade or more. Let’s say you are middle class Joe Average American. You have a full time job that pays $40,000 a year. Your wife also has a job where she’s earning $15,000 to $20,000 a year and maybe you have a couple children in secondary schools with part-time, minimum wage jobs earning $6.00 an hour. You are keeping up with your middle-class lifestyle, but you are not getting ahead, economically. Just maintaining status.
Your brother or a close friend comes to you and tells you about a bank where your savings deposits earn 100% per year. You tiptoe in with a modest deposit. You get paid as agreed. You shift in more and more funds, such as your retirement account funds. Pretty soon, you are receiving enough income that your wife can quit her job. And in a year or two you also find that you can quit your job as well. Moreover, your kids no longer have to work for extra pocket money and you are earning enough to put them all the way through your state’s colleges and universities.
Over the three full years I was with Fidelity and First Bank, we saw this very thing occur, over and over and over again. Average Joe American depositor was getting ahead, economically. Average Joe American’s wife was soon able to quit her job, and Average Joe soon followed her into that well-financed early retirement. Moreover, chances were good that they were following legal advice on how, lawfully, to avoid paying income taxes on the bulk of their offshore bank account earnings. They were leaving the rank-and-file job markets completely (and also the rank-and-file of income tax payers).
This does several things.
First (and perhaps foremost), it creates high anxiety for the Internal Revenue Service. They do NOT enjoy watching a decline in income tax revenues or in the numbers of people who are voluntarily filing annual income tax returns. Much of the “witch hunting” of me and of the pressure on the bank was IRS-inspired and led. Many who were called upon to testify before the various grand jury panels would send me e-mails after the fact recounting the high pressure and bullying tactics of IRS Criminal Investigations Division agents who seemed even to be directing the FBI and the Assistant United States Attorney on what to do and say to gain “full cooperation” from a former depositor. Each person called that later sent me a note mentioned being threatened with criminal prosecution for income tax evasion. This was, generally, a mystery to them since they were acting in accordance to personal legal counsel advice in how they arranged their financial affairs. But that is the substance of how they were bullied, nonetheless.
Second, remember that Joe Average and family no longer need to work to make ends meet. Ends are meeting nicely. So nicely that they pay off their automobile loans, their revolving charge accounts, their home loans—all debt. They become debt free, beholding to no one. Do you have any idea how reliant the U.S. economy is upon consumer debt to keep all the wheels turning? Do you think there is even the slightest chance that the “powers that be” truly want the nation to rid itself of the national debt or all of the Joe Average Americans to rid themselves of all of their debt?
Think of the implications. Start with the fact that those who don’t need to work do have significantly more time on their hands. Time for thinking. Time for planning. Time to contemplate what is really going on politically, socially, culturally and economically. Time for sharing their ideas and opinions with others. Do you think the American government wants to have tens of millions of citizens who can afford to retire in their 30s and 40s instead of dutifully slaving away for that gold watch at age 65?
One hundred years ago America was built on gold and silver equity instruments. Today it is propped up with non-gold/silver backed debt instruments. Lock, stock and proverbial barrel.
What happens to the debt barons when no one needs to borrow? What happens when people can afford to choose their own health care practitioners who might not belong to the American Medical Association? What happens when people with all of this extra time on their hands start studying health issues and the dangers of genetically modified foods? What happens when people with more time on their hands start studying the environmental implications of how their society is being run? What happens when no one wants to accept paper money that has no real backing to it? What happens when people prefer to use their own private currencies (instead of the official fiat currencies) to conduct their financial affairs? Would that not rattle a few cages in official circles?
The “American system” drapes itself in American flags and celebrates itself with praises on the country being a land of opportunity, the land of the free and the home of the brave.
I don’t know if you watched any of The Matrix movie series. But American life is a matrix operation. One does not do win favor in that system by “waking” people up to what is really going on that is all designed to keep them in perpetual servitude rather than freeing them as individual Sovereigns.
Once someone “wakes up,” there is really no going back for him or her. They become individuals living in the world but who are not of the world’s present system of things. That is threatening to the system itself—and in reaction the system will send swarms of its agents to eliminate the perceived threat to its existence.
Third, the impact, long term, on employment statistics is something that can also be projected.
With bank depositors leaving the rank-and-file of the job market in droves (among Fidelity and First Bank depositors), over time it will have a real impact of encouraging a job market that actually seeks to find a way of employing immigrants to illegal aliens in the United States. Yet the socio-economic policies of the USA have been set against attracting and receiving ever-increasing numbers of non-Americans to America’s shores.
Within the past couple weeks it was announced in Uganda that U.S. President George W. Bush was soon to unveil a program to get all illegal aliens in the United States to register and be accepted. I think it is perceived as a threat to the national security interests of the United States that Ugandans, for instance, and people from other poor countries from around the world have been figuring out ways to enter the U.S. and just not leave—with or without a U.S. visa that allows them to stay. In this post 9-11 era, the U.S. government has become even more intense in its desire to know all persons in the United States, i.e. to know who they are, where they are and what they are doing at all times.
GATES: And how did you and First Bank factor into that equation?
Brink: We didn’t. Not directly. But in projecting statistical realities it could easily be determined that left un-checked, the growth of First Bank’s use by American depositors would have an increasing impact on Americans leaving the job market for early retirements, thus forcing employers to widen acceptance of immigrants and illegal aliens into the low-paying job market.
GATES: And you think that was an underlying factor in you and First Bank being targeted?
Brink: No. I think it was a reinforcing factor in the decision that was made for other reasons.
GATES: But you’ve still skated around the factors in the Paul Collin news story originally published at AnExCIA and, now, also by Offshore Informant.
Brink: Okay. Let me face that head-on, then.
One of the significant areas in which both Fidelity and First Bank applied investment funds was in the development of gold refinery technologies. At one time we had three unrelated projects going in this sector. Different technologies being developed. Different, unrelated teams working on those developments.
Each of these projects concerned ways to enhance the typical yields achieved in gold ore processing and refining. Each demonstrated in clinical testing unique capabilities of doing just that— one of those processes by an enhanced yield potential, tested, of up to 1,800%. I later found out that the process was actually classified as a national secret.
GATES: And how did you get your hands on that?
Brink: It was brought to us. Handed to us on the proverbial silver platter by some of those who had been instrumental in its discovery and development to that point. I don’t know how he found out about all of that, but Paul Collin read me chapter and verse of how and by whom it was developed, how we got our hands on it, etc.
While I did keep all of those specifics as completely confidential, what I had done was announce to depositors and prospective depositors who attended one of a few Offshore Educational Institute seminars in Grenada to which I was a speaker that the bank’s goal in this was not so much profit oriented as it was oriented toward the creation of an alternative monetary system that could be used worldwide. Our intention was to fully back each banking instrument we issued with gold. We also wanted to create small-denomination banking notes issued by our bank and also fully convertible into gold, should a note holder ever desire to do so.
That was during my days at Fidelity and First Bank. When I resigned First Bank and became Chairman of the Union Reserve System and African Union Reserve System, the whole intention of the URS/AURS was to create national currencies and banking systems wholly backed by gold. The humanitarian treaties negotiated with various Congolese groups was simply to pave the way for peace so that the economic re-development of Congo could be accomplished in this manner, with the AURS Congolese currency becoming a world standard of value.
I was naïve enough to think that no one would much mind a private organization going to the rescue of Democratic Republic of Congo. It was for sure that the existing “powers that be” had done nothing to significantly help the Congolese people in decades. There had been no effort to bring the Congolese into the global economic mainstream with full rights, dignities and privileges.
But rattling the topic of currency supremacy is not taken lightly. Excuse me, but the fact is that before the American/British invasion of Iraq and the toppling from power, Saddam Hussein was removing Iraq from the U.S. dollar standard on selling Iraqi oil and switching to euros. Care to wager on whether euros or dollars happens to be the new choice of the new, American-installed Iraqi government? It wasn’t an case of feared Weapons of Mass Destruction. It was an issue of attempting to shore up global dollar supremacy. My opinion.
Look now at Saudi Arabia and advisors suggesting that it should not sell its oil for either dollars or euros, but should demand payment in gold. Ring any bells? The world is awash in intrinsically worthless paper currencies. Something of genuine value is the solution to what are constantly eroding paper currency values.
Consider what happens to all of the Joe Average Americans, if one by one the nations of the world conclude to take itself off the US dollar standard. There are trillions and trillions and trillions of American dollars circulating globally. If the dollar becomes perceived as not much worth the bother, what is going to happen?
The answer to that question is already a footnote in America’s monetary history. 1972. Richard Nixon. American travelers stranded abroad when overnight the US dollar was subjected to major international devaluation.
Why did that happen?
Because on an international level (although not at home in America) the United States was still insisting that its dollars were redeemable in gold. But when payments were demanded in gold, the U.S. government and the Federal Reserve balked and stalled and stalled in making those conversion payments in gold. Finally, European nations (principally France) got tired of the song and dance routine and the American insistences that American dollars had so much value vs. their local currencies, that they decided to pull the plug, accept no more stalling and demand immediate conversion to gold.
Big surprise. There were not enough gold reserves to make the payment demanded. The European governments, then, demanded a major devaluation of the U.S. dollar. I can’t remember. Think it was in the range of 50% devaluation.
That would be a stroll in the park in comparison to what would happen if a vast majority of nations all at once started sending all of their dollars back to the United States in search of something of value to buy instead of continuing to hold America’s intrinsically worthless paper currency.
We’ve also seen that in microcosm in the United States when its balance of trade with Japan was so out of balance that the Japanese started rushing to purchase America itself—land, buildings (including the Empire State Building in New York City), businesses, industries, resorts, you name it. It was quite the story at the time. The America that defeated Japan in World War II… the America that helped re-build Japan after the war… THAT America being purchased by the Japanese and rented back to the Americans.
Now imagine that on a much larger scale. Not just Japan buying out America, but also Germany, France, Belgium, Russia, Spain, Italy, etc. – all wanting something of value to replace their boatloads of US dollar paper currency that they are sitting on.
Okay, Joe American. Good thing that you got something of a head start by moving your savings to a bank that paid you so well that you could pay off all your debt and also start utilizing the private gold-backed currency your bank issues.
Fidelity Bank started heading in that direction. First Bank pushed even further in that direction in meaningful ways. For instance, one of the assets the bank held by deed of assignment was $47 billion worth of gold bullion held by the Bank of Japan. At the time we received that assignment, I think our total deposit liabilities amounted to less than $50 million.
We were in our infancy when struck down. I was intending to create an international system of banks—with participating banks in every nation and state and province on earth, if possible. A system that would be sort of an “ark of safety” to which individuals, families, businesses and industries could turn in the times of a global economic storm that I thought I saw brewing on the horizon.
GATES: So this is a principal way that you believe that you and the bank were perceived to be a threat to the national security interests of the United States, a nation that depends on the non-gold backed US dollar being financial king of the world?
Brink: Yes. The URS plan was openly published on the Internet on an African news site. First Bank’s plans in that respect had been voiced to small groups, but never published openly. That Paul Collin was able to get his hands on all of that background information is quite amazing to me. If he could become so fully informed while no longer working for the CIA, I have to admit that I am no longer shocked about what I was informed about the CIA concluding that the bank and I constituted threats to the national security interest.
GATES: So is that all of the story?
Brink: No. But it is the part of the story that can easily be proven and substantiated by records and confirmed by third parties.
GATES: What can’t you prove?
Brink: That in February 2000 I was invited to speak before a convention of leading representatives from most African countries. It was held in Cairo, Egypt. I was asked to introduce the concept of the Union Reserve System and its sub-part, the African Union Reserve System. I can prove that much.
What I can’t prove is that twelve hours before I was scheduled to make that introduction to the convention I was tipped off on an assassination plot against me to assure that I wouldn’t be able to make that speech. It took time to re-book an exit flight from Egypt. Talk about a hair-raising experience complete with a chase scene. That is as close as I ever want to come to being the unlikely hero of an action movie.
GATES: And what of the gold enhancement technologies that were under development?
Brink: I still have access to all of them through third parties, although none of the details are within thousands of miles of me. When the time is right, who knows?
GATES: And the concept of the Union Reserve System and African Union Reserve System? A true gold-backed currency?
Brink: Yes. Think of it and ask yourself, “Why not?” It is not as if the technology does not exist. It does. It is not as if the resources do not exist. They do. It is not as if this is some sort of new concept. It isn’t. But it would tend to create a global environment where governments had to be truly accountable, not simply authorize the printing of more money whenever they wanted to spend more money. Yet it is also not as if we don’t have the genius available to re-engineer the monetary systems of the world so that they are not continually prone to fully orchestrated boom and bust cycles.
Creating such an alternative monetary system was also the concept of Fidelity Bank and First Bank. The URS and AURS were simply natural outgrowths of that.
The concept is always available. Concepts are concepts; concepts are not individuals. No one owns a patent or a copyright on a concept. It just is and is always freely available to anyone, anywhere and at anytime.
And, perhaps, that’s the crux of it. It is concepts that are feared, not individuals. I can be relegated to the dustbin of history in total shame and be despised by all. The point of attempting to accomplish that against me is not that anyone fears me as an individual. What is feared are the concepts I was succeeding in developing and the acceptance of a conceptual vision that was occurring, as demonstrated by the phenomenal growth rate of the banks.
Reminds me of something a man named Frederick Douglas said a long, long time ago:
“Once a great truth gets abroad in the world, no power on earth can imprison it, or prescribe its limits, or suppress it. It is bound to go on till it becomes the thought of the whole world.”
Frederick Douglas was born in 1817 as an American slave. He died in 1895, a little over thirty years after Abraham Lincoln signed the Emancipation Proclamation declaring that all American slaves were freed.
GATES: What is it that you see, then, as the feared “great truth” that is being suppressed, at least by attempt, through the effort to “take down” both you and First Bank?
Brink: That we live in a world of abundance, not of lack. That there is no legitimate reason for 80% of the earth’s population to live in poverty so that 20% can live in relative abundance. That we do have the ability to engineer our political, economic and monetary systems in ways that liberate and empower, rather than enslave and impoverish. That nations can be creative enough to find ways of providing essential infrastructure and social services without the need to subjugate, harass and oppress their peoples at gunpoint in collecting taxes the people can’t afford to pay. That if we would simply determine to move in those directions, we would move ourselves out of the grips of daily fear and into the arms of delight in each other’s accomplishments and the true universal brotherhood of man.
GATES: After all of this, are you still so naïve? Such things aren’t likely to happen anytime soon.
Brink: Gandhi was once asked how he had been able in his single lifetime to accomplish such a dramatic change in his world. He said it was simple. Just “be” the change you want to see in the world.
Of course, it will happen, eventually. I have very strong and I think studied feelings about the current system and its ability to sustain itself. Many other well-respected scholars from the fields of economic, political-social and agrarian studies are saying the same things and have been for years. It’s not as if I’m the lone voice crying in the wilderness or anything like that. Something WILL give – and that will leave a vacuum for something new, something that, hopefully, will be better for those creating it and for everyone else, too. The current paradigm has its limits and is already unworkable in many ways and is widely recognized to be completely unsustainable. Who’s kidding whom?
One of the things I want to get back to work on is finishing a book I began to write in 1999, the working draft title of which is New Millennium Economics. There are so many elements of the present system that are viable and helpful, why do we insist on holding onto those things that will bring all nations to the abyss, when changing only a few factors would lead to the prosperity of all nations and peoples? I’m not talking communism. I’m talking about appropriately recognizing value in ways that empowers rather than enslaves people.
But maybe I should put it back on you. After listening to all of this, can you see why “they” may have concluded I was a threat to the national security interests of the United States? Anything that rocks the boat is a threat. The fact that they moved on us in our infancy is telling as to the magnitude of the perceived threat.
GATES: Returning, again, to your presence in Uganda, you have stated why you want to remain in Uganda. What you haven’t stated is why Uganda should want you to remain in its country. What have you done, specifically, to help Uganda? What is it that you are doing now in Uganda and what is it you wish to do in the future in Uganda?
Brink: Fair enough. I want to remain in Uganda so that I can complete the project of restoring all of the bank’s former depositors. In that process I will become amply financially endowed myself, although the way I’ve set it up is that bank officers and directors will be restored last of all and me as the very last of the last.
What I want to do with a good portion of what I’ll receive is to create two things to operate in conjunction with each other in Uganda. One is a school of entrepreneurship and the other is an entrepreneurs’ revolving venture capital fund.
I’ve spoken with many graduates of the largest university, here. These graduates hold degrees and post-graduate degrees in business administration. Their common complaint is that they can’t find employment.
I find such a complaint to be incredible-- not because I doubt that these individuals haven’t found an employer (I think Uganda’s unemployment rate is 30% or more), but because I can’t imagine anyone having an orientation to business and years of training for it not also realizing that they can become their own employers, start their own businesses, pursue their own business dreams and visions. Yet when I prod them on along these lines, I am struck by the fact that they have not even once considered it and wouldn’t know where or how to begin.
Here they are with three, four, five, and sometimes up to six years of university level training in business and business administration and they have never once considered starting and building their own business of some sort. They turn in dozens and dozens of employment applications, then sit and wait for someone to hire them.
I want to set up a three- to six-month training program in how to start and build your own business. The program would have each student identify an economic activity. Anything from chicken farming to agricultural value-added exports to brick making to auto body repair shops to textiles manufacturing and export to broadcasting or publishing to operating a stock brokerage or whatever.
Identify an opportunity for yourself. One that genuinely does excite you because of what you see as being the possibilities. Do your own market research, identifying key competitors and what their weaknesses might be and how you could do it better and more cost effectively. Figure out how to create and register a company and obtain all of the licensing that might be needed. Identify where you will be doing your corporate banking and exactly how to open an account with that bank. Identify the legal counsel and professional accounting services you would need, the equipment you would need, the raw materials, if any, or the stock for retail merchandising, the location, the budget you might need for advertising and promotion, how you would structure labor costs and what the available labor pool might be that you could draw upon. You know, do the essentials of business planning. And do it on a small business scale to start. Something manageable. Something where you can grow with the business as you learn whatever “real life” lessons there undoubtedly are to learn in that field of endeavor.
As an adjunct to such a school would be a revolving venture capital fund that those who do develop approved business plans could draw upon as seed capital and mezzanine-level expansion capital.
The fund would operate on Islamic banking principles. In other words those drawing on the venture capital fund would not be burying themselves and their businesses in debt. Banking debt chokes a business. Instead, there would be an equitable interest in the business granted to the venture capital fund itself, with an experienced businessman serving as a representative of the fund on the Board of Directors of each company that is a recipient of the fund. I want to destine Ugandan entrepreneurs for success instead of failure. Plenty of economic potential exists in this country. It is finding a way to see those potentials realized that seems to be the challenge for Uganda. I want to help Ugandans create solutions, solutions that employ hundreds, thousands and eventually millions of Ugandans. To have such oppressive employment statistics in a country with so much opportunity just isn’t right.
GATES: What about your personal life in Uganda? You married a Ugandan three years ago but you have no children born of your marriage to her.
Brink: My wife and I enjoy a good marriage relationship. Some matters, however, can’t be hurried and can’t be held back, but have a way of happening on their own and in their own time.
Still, the matter of having natural children in a marriage is not all of family life in Uganda. One of the things that would be shocking to North Americans and Europeans is the depth, strength and bond of Ugandan family relationships and the associated expectations that are incumbent upon someone who is a family member.
In marrying my wife I married her family as well and, accordingly, provide weekly support to my wife’s mother and those of her brothers and sisters still living at home, and I provide school fees for her siblings and for the children of some extended family members and so forth.
My wife’s father passed away when she was only a small girl and her family had a considerable financial struggle through the years following that. In essence I was adopted into her family and have, likewise, adopted her family and now provide for their care and keeping, be it medical emergencies or simply on-going educational expenses. One doesn’t marry a Ugandan and have only himself and his wife to consider. It extends much, much beyond that. And, in truth, I do enjoy being able to make a meaningful contribution to the lives of my extended Ugandan family. Having children of our own is something my wife and I leave in God’s hands.
GATES: You’ve answered just about everything I can think to ask. Real quickly, now, can you summarize the charges made against you and your response to them?
Brink: Okay. There is the main charge and then the associated charges.
The main charge is that those indicted defrauded investors of an amount alleged to be $206 million. The foundation of that charge is the prosecution’s assertion that the bank falsely claimed to have large assets. My response is that the bank made no such false claim, but really did have large assets representing a multiple of the amount of deposits it undertook.
The prosecutions entire case rises and falls on whether the bank had large assets. If the bank did have them, the prosecution has no case. The bank did have them. That can be proven.
The associated charges are conspiracy, mail fraud, wire fraud, money laundering, and consequent demanded forfeiture.
The prosecution’s case for conspiracy is that those who were indicted did know and understand that the bank didn’t have large assets and that they chose to encourage the placement of deposits with the bank and then committed mail fraud, wire fraud with the money that was defrauded from investors, those funds being the proceeds of crime, then money laundered those funds through accounts at other institutions with the result being personal enrichment, that subjects them to forfeiture.
To prove conspiracy, the prosecution must demonstrate that at the time deposits were being received, the indicted ones knew full well that there were no major assets. Since I know that here were major assets, I don’t see how the prosecution can demonstrate that I knew the exact opposite.
The prosecution’s many mail fraud charges stem from the fact that some American depositors sent us checks drawn on their home bank accounts. That was not a crime for them to do so. The alleged crime of mail fraud was when the bank sent those checks back to be cleared so that the deposit funds could be credited to the accounts of depositors. It is impossible for a non-American bank to accept checks drawn on American banks without sending those checks back to the American banks for clearing. Banking fact of life. Not a crime unless the initial receiving of checks was because the crime of fraud had been committed.
The prosecution’s many wire fraud charges stem from the fact that as private offshore banks, both Fidelity Bank and First Bank had to establish banking relationships with commercial banks, trusts and contracted service companies so that it could receive funds in US dollars and also transmit funds in US dollars. No private offshore bank can do so directly, but must work through commercial banks, trusts or other service companies to transact funds in US dollars (or in any other currency). Another banking fact of life. Not a crime unless the initial receiving of funds was a crime, in which case wiring the funds forward to any destination would also be a crime.
Only ‘dirty money’ needs to be ‘laundered.’ The prosecution’s charge of money laundering is based on all funds having been received from depositors were the proceeds of crime and that, thus, receiving and transacting on those funds through commercial banks, trusts and contracted service companies constituted money laundering.
The prosecution’s contention that any and all things that may have been done with funds personally received by any of the defendants must be forfeited, since the prosecution contends that those received funds were the proceeds of crime and anything done with those funds by law must be forfeited.
Like I said, the entire case rises and falls on whether the bank had more in owned assets than it had in liabilities to depositors.
GATES: But the bank did fail to meet its obligations to depositors.
Brink: Yes, it did.
It failed because it was the subject of much outside interference that resulted in failed business transactions.
But let’s say you are driving up a switch-back mountain road intending to get to a destination on the other side of the mountain. As you are driving along a giant bolder comes tumbling down from above and suddenly smashes into the hood of your car, knocking your car’s motor right off its mounts, breaking your front axel and causing your front tires to explode. It also smashes the windshield. You and the other passengers in the car are bumped, bruised, have a few broken bones and multiple cuts received from the flying glass when the windshield exploded in on you. Other than that, you are severely shaken up but still alive.
Along comes the helpful Highway Patrol. That Highway Patrol Officer doesn’t assist you and your passengers in any way, doesn’t call an ambulance or anything, but investigates the scene for five years, then decides that you need to be arrested and taken to jail to await a trial that might come about in another couple years. You see, he has concluded that the only possible explanation for the situation is that you were a criminally reckless driver who was deliberately intending to hurt your fellow auto passengers. Noting a coffee thermos in the car, he charges you with drunken driving, reckless endangerment, reckless driving, criminal assault and everything else he can think up-- and if convicted on all charges, you are facing a prison sentence of about 700 years.
The bank failed because of outside interference in its business dealings. It also failed because some arguably poor choices had been made at crucial points in time.
Consider that the driver of the car in the above illustration could have taken a longer route on a less hazardous road. By analogy, the bank could have offered traditional interest rates to savings depositors. That is certainly true.
The question is, however, whether those who stand indicted are criminals who each stand in need of life imprisonment because of the fact that the bank failed.
Suffering outside interferences is not a crime. Irritating. Frustrating. Tragic. Yes, all of these things. But not criminal.
Making poor business decisions is sad, regrettable and tragic also. But not criminal.
GATES: Thank you, Mr. Brink.
Brink: And thank you!
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Post by Admin on Apr 4, 2014 11:47:53 GMT
Territory of the Dominion of Melchizedek
Island of Taongi: Taongi is located at 14.38 north latitude and 168.58 east longitude lying within the Northeast Trades, thus there are steady winds from the northeast bringing mostly fair weather from November through June.
There are currently over 500 acres of land in the preparatory stages of development under the administration of the Dominion of Melchizedek.
Other Territories which the Dominion of Melchizedek has an interest include Antarctica, Clipperton, Karitane, and Solkolpe.
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Post by Admin on Apr 4, 2014 12:43:57 GMT
30 June 1998:
"As alleged frauds go, it would be hard to conceive of anything more audacious than creating your own phony country, promoting it as a major offshore financial center and charging people for bank and insurance licenses, IBCs, trusts and even bar qualifications. And why not throw in an 'international stock exchange' with several listings of fake companies with fake trading, all displayed on an elaborate web-site? Yet that's exactly what the people behind the Dominion of Melchizedek appear to have done, with some apparent success, judging from the fact that the Office of the Comptroller of the Currency in the US has had to go so far as to warn people not to do business with any 'banks' claiming to be based in DOM, as the 'country' is known, and has closed down DOM 'banks' operating in the US, including at least one from an address on Wall Street."
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Post by Admin on Apr 4, 2014 13:10:43 GMT
December 1991: Forbes
For it turns out that Vinedresser, 38, has quite a record. His real name is Mark Logan Pedley, which he later changed legally to Mark Wellington. A southern California native and father of three, he is a genuine bicoastal fraudster. In 1983 Vinedresser and a former California deputy attorney general were convicted of mail and interstate fraud. The charge: selling land that they didn’t own in a Sacramenton suburb. Vinedresser siphoned off escrow funds to rent fancy cars and make other investments. He got three years. In 1986 a Boston federal court jury convicted Vinedresser and a local lawyer of running a Mexican peso conversion scheme during 1982 and 1983 that swindled investors out of an estimated $6 million. Sentence: eight years and a $25,000 fine.
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Post by Admin on Apr 11, 2014 12:58:26 GMT
A custom-made yacht, luxury cars and beautiful waterfront property were the most obvious signs of the success of a Canadian businessman who had moved to the Caribbean island of Grenada. A friendship with that nation’s senior government officials was a point of pride.
Many of the trappings of this luxury lifestyle, however, are now in the hands of the U.S. government after Laurent “Larry” Barnabe was unmasked as a serial conman.
He has admitted his role in a US$170-million fraud involving bogus offshore banks, an operation aided by bribes paid to his government friends.
Prosecutors in Oregon describe the scheme as one of the most devastating investor frauds in America and this week Barnabe, 68, was sentenced to six years in prison, ordered to pay US$26-million restitution and forfeit money in Canadian banks.
Barnabe had a humble start as a single father of two young children in Quebec who met and, 39 years ago, married a single mother with a baby daughter.
He worked hard to support his family. He took courses toward an MBA and was an instructor for the Dale Carnegie Institute.
Somewhere along the line, however, he started cutting corners. Barnabe became an experienced swindler. In 1995 in Ontario, he pleaded guilty to selling unregistered securities, and in 1999 in Quebec, he was convicted on more securities infractions.
By the time of his Quebec conviction, however, he had already moved to Grenada and was training those who were selling the bogus bank investment to pensioners and credulous investors in Canada and the United States.
Between 1996 and 2000, Barnabe and several colleagues set up and ran a series of offshore banks with respectable-sounding names, including Fidelity International Bank and First International Bank of Grenada.
Their brochures were slick and colourful with an alluring slogan: “Offshore investing: Legal, safe, simple and wise.” They promised outlandish rates of return without risk. The pitch was perfect.
Thousands of investors ploughed millions of dollars into the banks that promised “safety and liquidity through insured and guaranteed high-yield investments.”
Alas, while the money remained liquid enough for those running the scheme it was never safe for investors.
For a while the victims received some payments but, rather than it being legitimate investment interest, it was a portion of money from new investors the conmen were always signing up. It was, U.S. prosecutors declared, a classic pyramid fraud.
Barnabe knew his scheme was shady. At one seminar he kept slipping up on his carefully chosen words used to try to skirt U.S. regulations on selling investments. When someone in the audience pointed this out, he quipped: “I’ve already incriminated myself, like, 50 times! Next time you see me I’ll be in shackles.”
His words, captured on video, were prophetic.
“The bank never had any hope of turning a profit, let alone paying exorbitant interest rates. Unwitting investors put their life savings and retirement funds into a scheme that was doomed to collapse,” U.S. prosecutor Claire Fay told an Oregon judge.
Accountants worked to trace more than US$170-million taken from victims: US$45-million was funnelled to private accounts; US$26-million was turned over to investors to keep the scheme running and the rest — US$104-million — was “squandered” by the conmen.
The entire scheme would have unravelled upon close inspection, but the “bankers” kept legitimate professionals at a distance.
The bank was housed in a second-floor office in a suburban shopping mall in Grenada. The supposedly multi-billion-dollar insurance company securing deposits was little more than a fax machine in the back room of a law office on the neighbouring island of Dominica.
The bank itself was “secured” by a 10,000-carat ruby carved in the shape of a boy sitting on a water buffalo, a gem that did exist but one the men never owned.
All they had was paperwork valuing it at US$20-million.
Their “assets” were documents showing investments of US$10-billion that were later shown to be counterfeit. When PriceWaterhouseCoopers was appointed as receiver for the banks, however, they could not recover enough assets to even cover their costs.
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Post by Admin on Apr 30, 2014 20:18:15 GMT
Wednesday, Jul 6 2011 - Fantasy Island: The Strange Tale of Alleged Fraudster Pearlasia Gamboa
The woman who more often than not calls herself Pearlasia Gamboa withdraws three sets of government identification from her wallet — two California driver's licenses and a U.S. passport — and spreads them on the table. Each bears a different name next to her own photo. A handsome Filipina who looks younger than her 60 years, Gamboa has high cheekbones, dark eyes, and glossy black hair. "I have to show you all my IDs," she says with pride.
Pearlasia, aka Elvira Gamboa, aka Pearlasia Gamboa, has granted an audience with a reporter this May afternoon for the purpose of demonstrating that she is not a con artist. Showing off her panoply of assumed names might seem an odd way to start. Then again, there is little about Gamboa that conforms to expectations.
She calls attention to a fourth form of identification, a green-and-gold business card bearing the company name "Pearl Asian Mining, Inc." Alongside a headshot of a beaming Gamboa in a yellow headdress and red beads is the name Bae C. Catiguman. It means "Princess of Unity," she explains, a title she claims was given to her by warring indigenous tribes among whom she brokered peace in the mountains of the Philippines. "I am a princess," Gamboa/Catiguman says.
According to federal and state authorities, she is also a serial scammer. A resident of Redwood City, Gamboa has been investigated by the Securities and Exchange Commission for fraudulently soliciting investments in an allegedly phony Philippine gold-mining operation between 2004 and 2008.
She is also facing accusations that she stole more than $300,000 from a San Francisco real-estate investor with ties to the family of infamous "Hollywood Madam" Heidi Fleiss, and then threatened to dismember him this year when he tried to get his money back.
And that's before the story of Pearlasia Gamboa starts to get really strange.
Gamboa is the past president of the Dominion of Melchizedek, an enigmatic island nation in the South Pacific. Leaders associated with Melchizedek — named after a holy man who makes a brief appearance in the Book of Genesis — say it is an ecclesiastical state similar to the Vatican, with its own laws and religion. However, it has never received diplomatic recognition from most countries, which may be because the atoll claimed as its territorial capital lies underwater at high tide. And the prominence of convicted con artists in the upper echelons of Melchizedekian government raises questions about the country's legitimacy and true purpose.
David Korem, the Dominion's former vice president and Gamboa's husband, has been prosecuted several times by federal officials in connection with financial crimes. Gamboa acknowledges he was engaged in illegal activity, but denies allegations that she has committed fraud or theft. Instead, she insists, contrary to the assertions of federal and state authorities, that she is a spiritual leader and entrepreneur who has innocently run afoul of laws intended to protect consumers from investment fraud.
"I don't want you to distort everything," she tells SF Weekly. "I want the truth. I'm coming to you. I'm showing you everything."
Getting to the bottom of that truth requires delving into a story that might have resulted from an artistic collaboration between Ian Fleming and Salvador Dalí. Gamboa's tale involves secret ore deposits, hidden stocks of Soviet nuclear armaments, the Queen Mary ocean liner, portions of Antarctica, a new version of the Bible, allegations of fake deaths and miraculous resurrections, and a collection of some of the most colorful aliases ever to grace America's criminal and civil case dockets. (According to court documents, Korem also answers to the names Tzemach Ben David Netzer Korem and Branch Vinedresser.)
While it's impossible to deny the outré entertainment value of Gamboa's dealings, this is comedy with an edge. Her latest alleged victim, real-estate investor Eric Diesel, says he fears Gamboa might try to do him physical harm. The SEC alleges in court filings that Gamboa persuaded a New York financial firm — which is not identified, per standard agency practice — to sell $5.4 million of stock in her fake gold-mining concern.
Given the complexity and diffuse nature of some contemporary stock investments, it's not always easy to put names and faces to those Gamboa and Korem are said to have defrauded over the years. But authorities say real people lost substantial sums as a result of the pair's bizarre schemes.
"They're highly entertaining," says Steven Suchil, a private insurance lawyer in Sacramento who investigated Gamboa on behalf of the state of California in the 1990s. "Unless you're burned by them."
In 1995, Gamboa appeared at a small bank in Shasta County seeking a $20,000 car loan. Rather than apply for a personal loan, she sought this sum on behalf of a financial entity she called Bankasia AG. A clerk suspected something wasn't right and reported her to state officials, who told her that it was illegal to represent herself as a bank without proper licensing.
California financial regulators were not prepared for what came next. "Her response was to come back with all this information about the Dominion of Melchizedek and how it was a licensed bank," recalls Kenneth Sayre-Peterson, acting general counsel for the state banking department, which investigated Gamboa at the time. Looking into it, investigators realized that the car loan was just the tip of the iceberg. Gamboa and Korem, he says, "were soliciting deposits from people. There was fraud involved."
An injunction was issued barring Gamboa from representing herself as a banker anywhere in the state. That put a stop to banking schemes involving the Dominion in California, Sayre-Peterson says, though it prompted an unusual form of retaliation. Gamboa used her position as president of Melchizedek to declare "spiritual warfare" on California's government. "I will do metaphysical battle with you in your dream state," Gamboa wrote to former California Deputy Attorney General David Green, according to a 1995 account of the episode in the Sacramento Bee. "And if you interpret your dreams correctly you will know that I am the victor."
What, exactly, had state bank regulators stumbled upon? Melchizedek, according to fraud experts who have studied it, was originally the brainchild of David and Mark Pedley, father-and-son con artists who operated for years in California, Mexico, Canada, and elsewhere. The pair perpetrated various acts of fraud in mystical symbiosis, sporting matching Nazarene-style beards and long, flowing hair. They created their own version of the Bible, a cribbing of the King James translation embroidered with idiosyncratic metaphysics. (In the so-called Melchizedekian Bible, the Holy Ghost is referred to as "Scientific Being.") One of Korem's oft-used aliases, Branch Vinedresser, appears to be a form of filial homage inspired by a verse from John 15: "I am the vine, and my father is the vine-dresser."
In 1982, the Pedleys were indicted and convicted for a real estate swindle in Placerville. Mark Pedley was sentenced to three years in prison. His father — who had four previous fraud convictions — fled to Mexico following the indictment, and was imprisoned there on unrelated charges.
Rumors trickled back to the United States that the elder Pedley had died while incarcerated. But his body never turned up, leading many American law-enforcement officials to believe he had bribed his jailers to help fake his death. "We got a report that he had died in a Mexican prison, but there was nothing to support that," says Edwin Tomko, a former federal prosecutor who drew up the indictments against the Pedleys.
After he was released from prison, the younger Pedley began doing business under a new name: Tzemach Ben David Netzer Korem. In 1993, through associates in Canada, he met Elvira Gamboa, a Manila-born divorcée who had begun dabbling in gold-mining concerns. Gamboa says she immigrated to the U.S. in 1973, and worked as a blood analyst in Bay Area medical laboratories. Upon meeting Korem, she says, she was intensely drawn by the beauty of his spiritual state, and decided to give up material things for a life of religious cultivation. "I was tired of making money," she says.
But this couple was not destined for asceticism, and worldly ventures were soon in the works. Gamboa says they hatched the idea of securing a homeland for the faithful. "I can help you get an island, because in my country we have lots of islands," she recalls telling Korem, who had previously laid claim to the remote Colombian island of Malpelo. "As long as we're doing what is righteous."
Melchizedek claimed as its new territorial capital one of the Karitane Islands in the South Pacific. The island was uninhabited, and for good reason, since it is completely submersed for part of the day. "By high tide, you better get out of there," says Gamboa, who acknowledges she has never personally visited the land mass.
French testing of nuclear weapons on South Pacific atolls prompted another declaration of war by the Dominion in 1995. Rather than the spiritual challenge issued to California banking officials, the Dominion threatened the French with old-line Soviet nuclear weapons it claimed were hidden by Melchizedekian allies in the Carpathian Mountains. This brinksmanship was ignored. France, like almost every other sovereign nation, has never recognized Melchizedek's existence. (The Dominion did succeed in establishing diplomatic ties with a single country, the landlocked and impoverished Central African Republic.)
The Dominion eventually expanded beyond its underwater seat of government to claim more land: three more tiny Pacific islands and portions of Antarctica. After annexing its polar territory, the Dominion began listing among its senior officials a figure with the surname "Penguini," a touch that a veteran California fraud investigator describes as "cute."
What was the point of such a lovingly detailed fiction? The Dominion of Melchizedek, according to government authorities, was intended to act as a sort of mothership for con artists worldwide, issuing fake banking licenses, passports, and other documents to lend a veneer of official authenticity to fraud schemes. "Everything about it is phony," says John Shockey, former head of the fraud unit for the U.S. Comptroller of the Currency.
In 1995, a man calling himself Gerald-Dennis Sayn-Wittgenstein-Hohenstein, who claimed to be a prince of the Dominion, was thrown in jail by a judge in Hong Kong for trying to pass a bogus $319,000 check from a Melchizedek-chartered bank. Jeff Reynolds, Melchizedek's secretary of commerce, was sentenced to four and a half years in federal prison on charges related to insurance fraud in Texas in 1996.
As for the car-loan episode that first put the Dominion on California officials' radar, Gamboa insists it was a misunderstanding. At the time, she says, she and Korem were living in a cabin on a riverbank near Mount Shasta. The inspiration for "Bankasia" was simply a combination of this salient geographical feature — the "bank" from riverbank — with a reference to the continent on which she was born. She has a harder time explaining why "AG," a suffix that stands for Aktiengesellschaft and refers to German financial institutions owned by shareholders, was included in this new identity.
Asked whether there could be any truth to Gamboa's claim that the Bankasia incident was an innocent mix-up, Sayre-Peterson, the state banking official, chuckles derisively. "They definitely knew what they were doing," he says.
After the tumultuous 1990s, Gamboa and the Dominion entered an era of relative peace. Gamboa says she relinquished Melchizedek's presidency not long after declaring spiritual warfare on California, and has not closely followed her nation's business since then. She and Korem eventually settled in the South Bay with a son, Hazemach.
Scamming associated with Melchizedekian plenipotentiaries has continued, on and off, but Gamboa stayed off the radar of finance authorities until June 2009. That was when the SEC filed a claim against her in U.S. District Court for the Northern District of California, alleging that she had engaged in a four-year scheme to manipulate stock prices for the ZNext Mining Corporation, which was also called Pearl Asian Mining Industries, Inc. In a series of press releases and financial disclosures from 2004 to 2008, the SEC asserted, Gamboa touted revenues of up to $37 million from a remote gold mine in the Philippines. In 2006, she announced that an expansive new ore-refining system would further save the company $10 million per year, increasing returns to shareholders.
According to the complaint, however, ZNext/Pearl Asian was nothing but a shell company. Gamboa did appear to be involved in some form of mining activity in the Philippines. However, her purported mine site was surrounded by private property, and had been inaccessible until 2007 — three years after she began boasting of the mine's success. "The site is located in a remote, mountainous region that was periodically affected by rebel activity," the SEC complaint stated. "Moreover, other than a claimed small scale mining permit for 49 acres, the company has yet to obtain approval from the Philippine government to mine the site." According to investigators, the refining mechanism that spurred excited press releases in 2006 was in fact a $595 machine for purifying scrap jewelry, purchased over the Internet, that was broken when delivered.
Scams similar to this one, involving penny stocks — stocks that have a very low value or are thinly traded — are known in the financial world as "pump-and-dump" schemes. Because of the low price of penny-stock shares, their value is easily distorted by lying about a company's activity.
A perpetrator of this type of fraud can issue millions or billions of shares, send out a string of press releases proclaiming advances for the corporation that bode well for future revenue, wait for share value to jump, and then sell vast amounts of worthless stock at a profit. For instance, the SEC alleged that after ZNext sent out a press release falsely declaring that a new cash dividend was available to shareholders, the corporation's stock value jumped from just over 13 cents per share to 21 cents per share.
Gamboa's line on all this is that she was betrayed from within by a corporate lieutenant who "wanted to take over my company." This malcontent, she asserts, made misleading statements to the SEC to damage her, and her past declarations that the company was thriving were accurate. She claims the gold-refining machine is "not a little dinky one," and was purchased in China for $160,000. Any fraudulent manipulation of ZNext's stock value, she says, was carried out by her husband without her knowledge.
SEC officials, while they declined to reveal the details of their investigation, say they have independently verified all the facts set forth in their complaint. "This was a pump-and-dump scheme," says John Bulgozdy, senior trial counsel at the SEC's Los Angeles office. "She did this so she could sell stock and profit." In 2006 alone, according to court records, Pearl Asian Mining Inc. — which changed its name to ZNext in 2007 — brought in $1 million of revenue from stock sales, more than half of which Gamboa "misappropriated ... for her personal use."
Gamboa never showed up in federal court to contest the government's accusations, and U.S. District Court Judge Vaughn Walker ordered a default judgment against her totaling $1.8 million — a $650,000 fine for the ZNext corporation, and $1.18 million for Gamboa personally — in August 2010. Gamboa was also permanently barred from selling penny stocks. Gamboa, who tells SF Weekly she has at least $1.5 million in liquid assets, has not paid the fines. She says she hopes to find a lawyer to get the decision reversed.
Trading in Pearl Asian/ZNext mining stocks also brought unwelcome attention to Korem. In the summer of 2010, he was arrested and thrown in Santa Clara County lockup as part of Operation Broken Trust, a nationwide crackdown on small-time investment fraud. The feds alleged that Korem had conspired to promise illegal kickbacks to a stockbroker if he would buy shares of ZNext, thus inflating the price, and that he had also created spurious press releases in a manner similar to Gamboa. After being extradited to Florida, he pleaded guilty and was sentenced to two years in the Federal Detention Center in Miami.
Gamboa says she no longer has contact with Korem, who she claims cheated on her and carried on his criminal activity without her knowledge. "I'm not lucky with men," she says. They have not divorced, and some legal authorities familiar with their activity speculate whether they were ever married. The question is not simplified by the potential applicability of Melchizedekian matrimonial law.
Indeed, documents filed in Korem's most recent fraud prosecution indicate that the man known by so many aliases (eight are listed in the federal docket) was leading a parallel life, complete with its own set of esoterically named loved ones, to the one he conducted in the Bay Area with Gamboa and Hazemach. In February of this year, Sadia Barrameda, the proprietor of a fashion boutique in Brentwood, Calif., presented a letter to the federal court in Miami begging for leniency in Korem's sentencing. "David Korem is many things," she wrote. "The most important from my perspective is that he has been an excellent father to our 6-year-old son, Tzedeq."
Like Gamboa, San Francisco real-estate investor and former Palo Alto auto shop owner Eric Diesel has a knack for telling wildly improbable stories with a straight face. In May, when he sat down with a reporter to talk about how $302,000 of his money allegedly ended up in Gamboa's hands, he sported jeans, a necktie, and long, dark hair tied at the back in two looping pigtails. "I know this all sounds crazy," he says. There is truth to this: Diesel's tale, like other subplots in Gamboa's saga, seems to come straight from a Hollywood film script too preposterous to be made.
Diesel says he loaned $302,000 to a Los Angeles businessman named Robert Rooks, who he says had plans to redevelop the Queen Mary, an ocean liner docked off Long Beach, as a tourist attraction. (Rooks, who was successfully sued for securities fraud by the SEC in 2002, could not be reached for comment.) After some time, Diesel became convinced for various reasons that his money was not in good hands and sought to have it returned. To help him, he turned to Gamboa, with whom he had spoken about potentially investing. Gamboa says she knew Rooks from his previous business dealings with her husband.
Last year, Diesel's $302,000 was allegedly transferred from Rooks' possession to a bank account under Gamboa's control. This is perhaps the last fact about their relationship that Gamboa and Diesel do not fiercely dispute. Gamboa asserts that she acted as Diesel's caretaker last year, helping him to cope with drug and alcohol addiction and putting him up in various Bay Area hotels while managing his money. Diesel, by contrast, says he never had problems with intoxicants, and that she had a gang of Filipino thugs keep him confined in hotels for months while she burned through his cash.
In the spring of this year, Diesel, who says he is now homeless, began making reports of theft to various law-enforcement agencies and sending long e-mails to Gamboa and many people she knows, demanding his money back. So far, authorities have taken little interest in the case.
Redwood City Police Officer Joshua Chilton says Diesel has been unable to provide him with concrete evidence of theft or fraud, and that his office has closed its investigation of the case. "I've asked him on multiple occasions for documentation, and all he's given me is gibberish," Chilton says. "Maybe there's a nugget in there someplace, but it's been long lost in the din of all these threats going back and forth between all these people." He says he has advised Diesel to pursue the case against Gamboa in civil court, rather than as a criminal matter.
Assistant U.S. Attorney Richard Robinson, who is based in L.A. where Diesel used to live part time, acknowledges in a phone conversation that Diesel has been in touch with him but says his office has not launched an investigation. "He did bring some allegations to my office and we declined to pursue them," he says.
Frustrated, Diesel began contributing extensively to a Wikipedia article depicting Gamboa as an inveterate con artist. She did not react kindly.
"YOU ARE TOTALLY POSSESSED BY SATAN AND THE DEVIL THAT TAUGHT YOU TO FABRICATE UNTRUTHFUL STORIES YOU CAME UP WITH," she wrote in an e-mail to him whose hostile tone was unmistakable, even if its grammar was difficult to parse. "AND THAT YOU SHOULD HAVE TO BITE YOUR TONGUE HARD UNTIL IT BLEEDS AND YOUR HANDS WILL BE CUT INTO SEVERAL PIECES UNTIL YOU ARE NO LONGER ABLE TO WRITE OR POST MALICIOUS AND VICIOUS LIES IN THE WICKIPEDIA [sic]."
Diesel interpreted this as physical intimidation. "It's very scary to have a threat to have your hands cut off after you've been kidnapped," he says. Gamboa says her words were taken out of context. "I didn't tell him I'm going to cut it," she says with a shrug. "I said the devil will cut it. Because I cannot talk to him rational. He is irrational, so I use my spirituality. I use my God."
SF Weekly was unable to verify Diesel's account in its exotic particulars — the Queen Mary connection, the role played by Rooks, the allegations of kidnapping. But one thing is not in question. Gamboa openly admits that she has Diesel's money, of which she says just over half is left after various bills for his medical and lodging expenses were paid last year. However, she says she is holding it in anticipation of punitive monetary damages that will be levied against him when she takes him to court for defamation — over his claims that she took his money.
"It's $160,187," she says, indicating the residual amount. "But I'm not going to give that to him because he's going to be charged for punitive damages for what he has done to me." Anything left over after these expected damages are paid, she insists, must go toward his psychological treatment. "I will pay the rehab and the patient center," she says. "He has to go to a healing center. He is insane."
Diesel says such statements are part of a ploy by Gamboa to discredit him. As a character reference, he directs SF Weekly to Paul Fleiss, a Los Angeles pediatrician and the father of Heidi Fleiss, the notorious "Hollywood Madam" who was arrested in 1993 for running a prostitution ring catering to celebrities. The elder Fleiss pleaded guilty in 1995 to helping his daughter launder money from the operation.
In a telephone conversation, Fleiss says he has known Diesel for four or five years. He describes him as "a very smart man" who appeared to be fairly wealthy when they met, and who enjoyed buying gifts for his acquaintances. "He is a little extravagant," Fleiss says. "He would hike in the park with bare feet, and he would wear two ties. He was very eccentric. He met a lot of people, and he was very friendly to all of them. A lot of Koreans."
As her own reference with regard to the Diesel saga, Gamboa directs a reporter to Gustavo Xar, a Guatemalan mover who helped transport some of Diesel's property from a house in Southern California to storage in Redwood City under her supervision. Xar, who has been copied on the dozens of antagonistic e-mails that have flown back and forth between Gamboa and Diesel over the past few months, expresses an agnostic view of the pair's relationship. "I don't know which one's lying and which one's not," he says in thickly accented English during a telephone interview from Arizona, where he now lives and works. All that he remembers from the moving job, he says, is eating lunch at a Chinese restaurant in L.A. last year with Gamboa and Diesel. At the time, they seemed like good friends.
Gamboa has flirted with bizarre fraud schemes on and off for at least two decades, and continues to attract a flow of cash from unwitting investors. How does she do it? Experts say this is not unusual. Financial crimes of all sorts are resource-intensive to investigate and difficult to prove. Korem was most recently apprehended only after one of his associates ratted him out to the federal government, allowing agents to record a phone conversation about illegal activity related to ZNext stock. Penalties in civil court can serve as a deterrent, but are less effective when a defendant decides, as Gamboa has, to ignore the legal proceedings against her.
Penny-stock fraud, which involves a virtually unregulated market easily accessed by anyone with an Internet connection, is notoriously tough to police. "It is fairly easy for a person with limited capital to acquire a shell corporation and then use that corporation to engage in a pump-and-dump scheme, if that person has the ability to tell a compelling story," says Ryan Dwight O'Quinn, a former federal prosecutor who directed the South Florida crackdown that led to Korem's arrest. (He declines to say whether Gamboa was ever investigated by his office.)
Gamboa appears to have gone a step further. She doesn't just tell a compelling story; she lives a fantastic one. From her bogus island nation to her questionable overseas gold mines, Gamboa has more or less protected the borders of an enigmatic empire of suspect business ventures. Over lunch at a Salvadoran restaurant in downtown Redwood City on a recent afternoon, she says she has the strength to deal with future challenges, whether from Diesel or federal agents, in part because of the hardships she has already faced.
Last year, she says, amid the stress of the SEC proceeding and the arrest of her husband, she suffered a serious aneurysm. When asked what her resulting condition was, she responds without missing a beat.
"I died."
You died?
"I died. At least, that's what I call it."
She says she was dead for three days, not unlike another well-known religious leader, and then returned to the world of the living. Pressed about the details of her resurrection, Pearlasia Gamboa, aka Elvira Gamboa, aka Pearlasia, aka Bae Catiguman — princess of peace, declarer of war, past president of a country that does not exist — simply bats her dark eyelashes and smiles.
"It was a miracle."
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Post by Admin on Apr 30, 2014 20:23:00 GMT
Melchizedek’s Dominion
There is a connected group of con men out to fleece everyone they can. These con men have a nation: the Dominion of Melchizedek. This is about that nation and these con men.
David Evan Pedley was a con man. He taught his son Mark to be a con man. Together they wrote a new Bible and created a nation. They also swindled millions of dollars from people.
David Pedley was part of a loose organization of a hundred or so con men that came together after the Second World War. During the 1960s this group specialized in “Prime Bank Securities”, a non-existent class of investments. Chief among these criminals was Dr. Clifford Noe. (That’s right, Dr. No.) Noe was finally busted in 1972. Wall Street Journal reporter Jonathan Kwitny described this organization in his book The Fountain Pen Conspiracy. In that book, Kwitny called David Pedley “the world’s greatest con man”.
Pedley was indicted on several charges and served a few years in jail. After testifying against an organized crime family associated with some of his schemes, he was taken into a witness protection program in 1975 and given the name David Wellington. He was moved to California where he teamed up with his son in a real estate-based scam that also involved a former state Deputy Attorney General. Facing numerous indictments, the Pedleys fled to Mexico. For a time these two ran a money-laundering racket based on an imaginary off-shore bank. Mark Pedley was arrested and deported for a visa violation. Soon, David was incarcerated in a Mexican jail. It was there that he began writing The Melchizedek Bible.
In the 1940s and ’50s, David Pedley had taken lessons from Dr. Josiah Merriman, a Christian Science mystic who promoted a system based around Melchizedek, a priest mentioned twice in the Old Testament and several times in Hebrews. Over the centuries, Melchizedek has been cited by Jewish and Christian mystics as some kind or other of special being ranging from Excellent Priest to Jesus In Person.
Christian Science mysticism is, well, pretty mystical. Mary Baker Eddy emphasized spiritual truth over material evidence — “Mind” over matter – which can be a very useful tenet to a con man. After all, if reality is what we believe rather than what we can sense, than those imagined Prime Bank Securities are real. At any rate Pedley re-wrote the King James Bible (or “re-translated” it) to reflect this concept. The first part of Genesis does not refer to God creating the world of matter, it’s a metaphor for divine revelation. Or something like that.
While David was working on his holy task, Mark was in and out of jail. During the times when he was in, Mark also participated in correcting the errors in the King James Bible. By 1986, the father and son writing team had finished the important parts of this work: Genesis, Exodus, Matthew, and Revelation which was published as The Melchizedek Bible. But it was also during this time that Mark and David came up with the idea of creating a nation. Of course they named it after Melchizedek, but at this point, the country was only a name, it had no territory.
David died in 1987. At least there is an official death certificate for him from that year. When his body was received in California, Mark refused to allow authorities to fingerprint it. Some law enforcement officers believe that David never died and is still out there today, conning people. The Dominion of Melchisedek has an ambiguous comment: “…certain government regulators doubt that David is really dead. Perhaps they are correct, since good never dies.”
Mark was finally paroled in 1990. Immediately he changed his name to Tzemach ben David Netzer Korem. Later, this became Branch Vinedresser, which is, Mark says, the translation. He also operated as David Korem and, probably, other identities. Very soon after being paroled, he went back into defrauding people and was quickly busted for parole violations. Released in 1993, Mark married Elvira Gamboa ( AKA Pearlsasia and forty or so other aliases). These two set about finding territory for the Dominion of Melchizedek. Gamboa became its first president. The idea was that the DoM was an “ecclesiastical state”, like the Vatican, even though Pedley has been careful not to push an official Melchizedekan cult.
Over the years there have been several locations for this imaginary nation: Karitane Atoll that is underwater half the day, a slice of Antarctica that seemed unclaimed [see end of post for more], an island off South America composed entirely of guano (is that a metaphor or what?), and so on and so forth. Official entities from Fiji, the Marshall Islands, and many other places have denied that the Dominion of Melchizedek exists even though it claims to be situated in their territory. Here’s one location, Taongi or Ratak Atoll in the Marshall Islands group:
Why bother with all this? Well, if you have a nation you can issue currency and license banks and incorporate businesses. You can give legitimacy to organizations and institutions. If all else fails, you can sell passports. In 1998, three men who claimed a connection with Melchizedek were caught selling passports in the Phillipines for as much as $3500 each. The trio had cleared more than a million dollars in two years. One, an Australian who was already famous for a race horse fraud, escaped. The other two went to jail for a while. Mark Pedley made an official Melchizedekean announcement that anyone connected with the fraud would be removed from office in that nation.
By that time, the Dominion of Melchizedek was fairly well known to law enforcement who, time and again, made unequivocal statements that the nation was a phony and investors should steer away from any scheme connected with it. But during the 1990s, several places were fooled and actually accepted Melchizedekan passports. Mark Pedley travelled to Fiji on one and was thus able to say that Fiji recognized his nation.
Oh, yes, this is all an amusing farce and hipsters can buy a flashy cool passport to show their friends and be in on the joke. Pedley doesn’t mind a straight-faced joke or two. The quote above about his father’s death, for instance, or, after claiming a wedge of Antarctica, the list of Melchizedek’s officials changing to include a M. Pinguin. And I bet he thought it was amusing to declare war on France when they commenced nuclear testing near Ratak and then to claim victory when the tests ended two days early. It’s easy to laugh at other people being fooled and they had too much money anyway and you can’t fool an honest man and so on. But you might reflect that those folks scraping together the money for Melchizdekan passports were looking for a way to travel to places where they could earn a living as chambermaids and janitors.
But let’s look at a Melchizedekan con man and some of his games. Oregonian Gilbert Allen Ziegler (alias Van Arthur Brink) has engaged in a number of curious operations. In the 1980s Allen was involved with various religious organizations, especially the Helping Hands Ministries and the Full Gospel Businessmen’s Fellowship that he controlled. In 1994 Gilbert was bankrupt but found a new start in Hawaii thanks to $25000 he inveigled from an Oregon woman. He created an investment scheme that brought in cash — he was promising 250% returns — and quickly parlayed this nest egg into enough to buy a Nauru banking license for $50000. [The above and what follows, except where otherwise linked, is from One Big Fib: The Incredible Story of the Fraudulent First International Bank of Grenada by Owen Platt.]
Nauru is a place with less than 8000 residents — the Vatican is the only country on earth with fewer people — but for a little while it made enough from selling phosphate reserves — guano mostly — so that everyone thought they were rich. When the phosphate boom ended, Nauru turned to money laundering and scam-sheltering. Lots of bad banks were licensed in Nauru. But here is the thing, any official bank licensed anywhere has cachet in international finance.
The Fidelity International Bank of Nauru was an entry and a learning stage for Ziegler. He assembled a team and learned something about banking. The Nauru bank was a class “B” institution, meaning that a class “A” bank was overseeing its operation, so Ziegler had to take some care not to do anything too outrageous. He targeted Christians, claiming a new kind of bank that was out to help rather than exploit. And, so long as he was class “B”, opportunties to exploit were limited. All this was just experience. Ziegler and his team aimed at creating a class “A” bank where they could rip to their heart’s content. Enter Grenada.
Grenada is a small country best-known for being invaded by Ronald Reagan when it threatened to form a commie government. After that, Grenada went whole-hog capitalist and became the launching pad for many not-so-legitimate enterprises. It wasn’t that hard for Ziegler to set up a bank there, especially after showed his credentials from the Dominion of Melchizedek who had appointed him Melchizedek’s Ambassador to the Caribbean.
So the First International Bank of Grenada was capitalized by the Dominion of Melchizedek. It’s not that hard. It’s just a process of getting the government (of Melchizedek) to recognize the worth of whatever you’re selling, they give you some paper and you’re rockin’. In one case worthless land in Arizona was valued at millions of dollars by Melchizedek to further one of the Pedley/Gamboa schemes. In this case Melchizedek pledged billions of dollars and a carved ruby that was priceless as well as non-existent, just like the billions.
So the First International Bank of Grenada was set up and immediately began an investment program that drew in millions of dollars. Of course, this was a ponzi scheme. On top of it the bank also had a pyramid scheme, where people being scammed were rewarded for bringing in new investors, and a series of motivational programs meant to suck you in another way. Investors who became a little anxious were remined that the bank was protected by the Investors Deposit Insurance Company and was, like all banks, audited. Few investors realized that the IDIC was also part of the fraudulent banking network based in Melchizedek and that the auditor was a CPA who had lost his license. The FIBG was lucrative enough to spawn other projects and sub-licensed about thirty-five other Grenada banks, all of them scams.
People did become suspicious and David Marchant, who publishes an on-line newsletter looking at overseas investments, was just about certain that FIBG and its offspring banks were scams. Pressure mounted and finally Ziegler decamped for Africa, where he had formed some connections. When FIBG failed satellite banks also went under. Grenada’s banking system collapsed and did not recover for years. Some $375 Milion vanished.
When Grenada’s Bank of World Peace, founded by an ex-Transcendental Mediation guru named Taansen Sumeru, and its prime investment opportunity, Quantum Gold, disintegrated, Sumeru shrugged and said it was all due to “dark forces”. Sumeru had written a book on Sovereignty Consciousness, the notion that you are your own country if only you realize it – that sounds much like Mind over matter to me.
Anyway, in 1999 while authorities in Grenada were still dithering about what to do, Ziegler set up shop in Uganda. There he got a plum assignment. [What follows is from Dancing in the Glory of Monsters: The Collapse of the Congo and the Great War of Africa by Jason Stearns.] Laurent Kabila had recently won control of Congo but Rwanda was unhappy with him and sought a replacement. Then Vice-President Paul Kagame of Rwanda created the Congolese Rally for Democracy (RCD) in 1998 as a front for armed intervention in the neighboring country. An idealistic and well-meaning man, Earnest Wamba, was made leader of the RCD. Wamba wanted to better living conditions in the Congo by investing in health, eduction, and infrastructure. Instead, he was leader of a group controlled by foreign powers that massacred thousands and looted every place they occupied. In desperation Wamba sought outside investment and discovered Gilbert Ziegler.
It’s interesting to ponder the spectacle of a representitive of a fictitious government’s non-existent bank negotiating with the leader of a non-existent revolution that, if successful, would set up a puppet government. Anyway, you know what’s going to happen. Ziegler uses his official position to raise money that never goes to the Congolese. Wamba, at first irrelevant, then farcical, loses sight of his goals. Surrounded by child soldiers, he gives speeches about protecting children. In 1999 he is chased out of office. The endless agony that is the war for central Africa continues.
The point here is that Ziegler sucked profit from all this misery and that, I think, typifies the con men and women based in the Dominion of Melchizedek. These people are neither nice nor amusing. Ziegler was finally extradited and charged in the US. He died in prison, awaiting trial, in 2005. Meanwhile, Mark Pedley and his wife continued their various thieveries. In 1994 a so-called 60-40 scheme fell apart in England and then the Inner Sanctum investment group (registered in Melchizedek) behind it after someone calling himself His Serene Highness Gerald-Dennis Sayn-Wittgenstein-Hohenstein was revealed as a fraud. Scams in the West Indies, Hong Kong, and the US came to light, all with a connection to the Dominion of Melchizedek. Officially, the DoM was very upset and liquidated a bank or two of the many that they licensed and distanced itself from con men like Jeff Reynolds, Melchizedek’s Secretary of Commerce, when he was jailed for insurance fraud. Finally, in 2010, Mark Pedley was jailed in Florida for a penny-stock fraud.
The way the fraud worked was that a whole lot of stock was issued based on worthless mining claims. The shares were then sold for pennies until enough people were on the hook, then a few hundred shares were bought for $5 each. The jump in stock prices seemed to indicate a jump in value so people bought a lot until Pedley and his accomplices sold their shares at an inflated price. They were set to make hundreds of thousands when the authorities moved in.
Elvira Gamboa continues the Melchizedek operation. She has been investigated since 1995 and has managed to avoid prosecution. She is a very spiritual person, she assures everyone, it was her ex-husband, Mark Pedley, who committed the crimes and she is shocked, shocked to hear about his depradations. The state of California continues to pursue an indictment against her which has caused Gamboa to declare “spiritual war” on the state.
The organization of con men that Zwitny identified still operates. In reading about the Pedleys and Melchizedek the same names crop up again and again. Con men have longevity: in 2002, a 74-year-old Dr. Noe was convicted of fraud, thirty years after Zwitny first wrote about him. Mark Pedley is due to be released from his Florida cell this June.
Notes:
Besides everything linked above here is an enormous amount of information presented in as confusing a way as possible. But if you skim and sift there is a lot in the link.
More on Antarctica:
Here’s a map of Antarctica with international claims. The Dominion of Melchizedek claims the territory between 90 and 150 degrees W. On this map that is shown as claimed by the Republic of New Lemuria. Hmmmm….
Say! I notice that New Lemuria speaks of itself in the same exact words as the Dominion of Melchizedek — ecclesiastical sovereignty and so on. Created 1994, the Republic also has land in… What! Taongi? Karitane Atoll? So the Republic of Lemuria claims all the territory that Melchizedek does; is it a splinter scam? Virtual war? I would like for this to be a secret artists’ coup ousting the criminals but then I hear that New Lemuria is the base for a Prophecy Research Institute that gives psychic investment advice and I know there’s no hope.
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Post by Admin on Apr 30, 2014 20:46:24 GMT
March 9, 1990 - Deputies Round Up Fraud Ring
A world-renowned con artist based in Broward County used phantom companies to defraud struggling businesses and a Luxembourg bank out of millions of dollars, police said on Thursday.
Detectives identified Philip Morell Wilson as the brains behind a scheme that was cracked by the Broward Sheriff`s Office Economic Crime Unit.
Thirteen people living in four states were charged on Thursday with participating in the scheme; seven of the suspects were arrested. All of the suspects face charges of racketeering, organized fraud and grand theft.
``Wilson is really in the forefront of swindlers,`` said Detective Muriel Waldmann, of the Economic Crime Unit. ``You could walk out with only your socks on`` after a business meeting with him, she said.
Waldmann said Wilson ran a sophisticated, large-scale fraud that operated in eight states, two European countries and various Caribbean islands.
Wilson is accused of setting up a phony entity called the International Investment Trust. Police say the trust issued worthless certificates mainly to debt-ridden companies that hoped to use the certificates for collateral to obtain loans.
But the trust and its four subsidiary companies existed only on paper. Operating out of several Broward offices from 1983 to 1988, Wilson swindled fees up to $30,000 from the failing businesses, said Waldmann, who led the 18- month investigation.
Wilson was not among those who could be located for arrest on Thursday. But his lawyer, Paul Lazarus of Miami, said Wilson plans to turn himself over to authorities at a scheduled hearing on Wednesday.
Lazarus said Wilson is free on bail from federal prison while he appeals a conviction for parole violation. The attorney said Wilson is in South Florida but says he does not know where.
Wilson was convicted in 1984 of conspiracy to smuggle drugs, and since then has been convicted of fraud, bail jumping, interstate transportation of stolen property and conspiracy.
His exploits in the late 1960s and early 1970s with the fraudulent Bank of Sark in the Channel Islands south of England moved Wilson into the upper echelon of con men. His role in that scheme, which netted him as much as $70 million, was detailed in the 1973 book The Fountain Pen Conspiracy.
Not only is Wilson at it again, but he never stopped commiting frauds along the way, Waldmann said.
Waldmann said Wilson`s International Investment Trust tricked at least 12 businesses and business people out of at least $2.5 million, although she expects the number of victims and amount of money to climb as the case develops.
Charged with taking part in the scheme are Wilson, 52, and his girlfriend Bonnie Uttal, 42, known as Bonnie Sandler, of North Miami Beach; Booker Camper, 43, a Memphis accountant; Charles Brown, of St. Louis, Mo.; Joseph Macaluso, 54, of Marietta, Ga.; and Renato Pacini, 46, of Coral Springs.
Others charged are William Windsor, 39, of Longwood; William DeFalco, 43, of Plantation; John Lavalanet, 40, of Miami Beach; Alvin Portner of Coconut Creek; William Fox, 60, of Plantation; Jeffrey Parrish, 35, of Panama City; and Kenneth Hobbs II, 24, of Fort Lauderdale.
Those arrested were Uttal, DeFalco, Lavalanet, Pacini, Hobbs, Portner and Camper; bail was set at various amounts between $513,500 and $580,500. The others will be arrested when they can be located, police said.
One of Wilson`s reported victims says he lost $30,000 when he sought financing for his seafood processing company.
Robert Ramming, 56, of North Lauderdale, says that his company was not in debt but needed cash and could not obtain it because his ships were registered outside the United States. After shopping around for ways to get the money, Ramming turned to Wilson, who introduced himself as ``Dr. Wilson.``
``He conned me. He`s an extremely clever man,`` Ramming said in a telephone interview from England on Thursday night. ``I want to get them off the street. What happened to me shouldn`t happen to anybody else.``
Ramming never got a planned $2 million loan, and does not expect to recover his $30,000 fee.
Waldmann said Wilson deliberately created a complex scheme to help avoid prosecution.
Officials describe Wilson as a charismatic and colorful man who sometimes calls himself ``the Shark of Sark`` because of the Bank of Sark fraud he masterminded. He served nearly a year in prison in connection with that scheme, which used a third-floor office on the island to defraud thousands of business people.
His federal parole officer, Rory McMahon, said Wilson is ``a very bright, likeable, intelligent, manipulative individual.``
``If you offered him a chance to make $1 million legitimately and $1 million illegitimately, he would take the illegitimate money,`` McMahon said.
Some of those charged along with Wilson also have checkered pasts.
Windsor has been convicted in Florida of fraud, Brown has been convicted of mail fraud and DeFalco has been convicted on a state tax charge, Waldmann said.
Pacini unsuccessfully ran for the Broward County Commission in 1986; he was under investigation at the time for his involvement with Woodbridge Investments, one of the phony trust`s subsidiary companies.
Kent Neal, who runs the Broward State Attorney`s Economic Crime Unit, which assisted with the investigation of Wilson`s companies, said the trust is one of the largest and most complex schemes of its type that he has seen in his years as a prosecutor.
But he said Wilson may not be as smart as he fancies himself to be. ``He may have an overinflated opinion of his own criminal genius -- because I`ve always said the really smart ones we don`t catch.``
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Post by Admin on Apr 30, 2014 20:47:34 GMT
Feb 18, 2002 - Arrests signal return of 'Fountain Pen Conspiracy'
Call it deja vu. Coral Springs lawyer Louis S. St. Laurent II smelled a rat as he strode into a nondescript executive suite in the east tower of Boca Raton's Corporate Center behind the Marriott Courtyard. At his arm, his French Canadian client, whose group had already plunked down $10,000 cash as a consulting fee to a Las Vegas septuagenarian broker on the way to $11 million of promised venture capital. A fellow owner of St. Laurent's Hollywood-based Le Soleil de la Floride the largest French-language newspaper in the state asked him to help the Canadians with due diligence while seeking venture capital. As St. Laurent and his client entered a cozy conference room, St. Laurent found himself staring at Paul Noe, now 74, who called himself Paul Noe Randall. It's the same man who St. Laurent, as a Florida prosecutor, put away 30 years ago in a federal Connecticut prison. Noe was part of a network subsequently profiled in the book, "The Fountain Pen Conspiracy." Noe served eight years for grand theft and bided his time with a few of the Watergate felons. He later did two years in Mississippi, St. Laurent said. In the 1970s, Noe and his younger brother Clifford Dixon Noe, now 71, worked with a loose network of nearly 100 international con men, systematically stealing at least $100 million in advance loan fees, St. Laurent said. Their latest misadventure has allegedly ripped off at least $2.25 million from victims, sources close to the investigation said. The pair always needed a phony bank as the primary instrument of their fraudulent schemes. During the past two years, the brothers formed two companies: the Great American Trust Co. chartered in South Carolina and the Great American Trust Corp. filed in Florida. In promotional documents, the pair stated GATCORP was a subsidiary of GATCO. No one has computed the total damage yet, St. Laurent said, noting he talked with a Jackson, Miss., lawyer Tuesday, who said his client has paid GATCO and another Noe-controlled entity, PAAM, $250,000 advance fees in a venture capital deal. Deja vu. 'I'll bring you down'
Now, St. Laurent found himself again working closely with FBI and SEC investigators to keep an old promise that landed the brothers in jail Tuesday, setting the scene for another chapter in Jonathan Kwitny's book on international con men: "The Fountain Pen Conspiracy," reissued in 1993 as "The Super-Swindlers." "If you ever do this again," St. Laurent promised Paul Noe 30 years ago, "I'll bring you down." And down they came. On arrest warrants issued from the FBI's Columbia, S.C., office, agents in Boca Raton on Tuesday arrested Paul Noe and his brother Clifford, now known as Cliff Goldstein after a 1992 Broward Circuit Court name change. The FBI jailed the pair in West Palm Beach, according to FBI spokesman Tom O'Neil of Columbia. O'Neil said the pair are charged with wire fraud, interstate transportation of a person in execution of a scheme to defraud, and conspiracy. If convicted, each man faces maximum imprisonment of 10 years, O'Neil said. The pair appeared Wednesday before U.S. Magistrate-Judge Linnea Johnson. Tall and slim, Goldstein shuffled into the court room, feet shackled wearing handcuffs. He wore tortoise-colored glasses and a blue prison jumpsuit. His hair was silver gray and he wore a full matching beard, looking like an Amish farmer, except for his white sneakers. He nodded to his wife, Beth, and daughter Sarah, who sat in the back row. Suddenly, the sound of sobbing surfaced when Goldstein made eye contact with his family. Then Paul Noe stutter-stepped in behind Goldstein, sitting down along the east side of Johnson's court room. Balding with gray hair, Noe appeared better nourished, sporting a paunchy mid-section. Like his brother, Paul Noe was tall, at least 6 feet. He wore a blue-striped dress shirt and tan slacks. Neither man smiled. When Johnson called their case, both stepped forward with their lawyer, Kenneth Stein of Deerfield Beach. Stein tried making the case for the pair to be released without bond or bail. He said Goldstein had suffered a stroke in September and his wife needed care and was wheel-chair bound. And besides, Goldstein's adopted daughter was being home schooled with a learning disability, he said. Assistant U.S. Attorney Karen L. Atkinson demanded each be held on $250,000 bond. She noted that Goldstein owned a home in Costa Rica and wasn't that ill. He had flown there for dental treatment last year. Johnson piped in that both had "extensive criminal histories, all fraud related." As the 10-minute hearing concluded, Johnson set bond for Noe and Goldstein at $250,000 and conditioned release on the pair turning in their passports and limiting travel only to South Florida and within South Carolina. That's where the brothers are likely headed after a Feb. 27 removal hearing that Johnson set. Johnson asked if two others charged with Noe and Goldstein were in custody. Atkinson said they were not. Asked for his clients' position on the fraud and conspiracy charges, Stein simply said, "No comment." Why did the pair come out of retirement? "It's not the money, it's the thrill of the next deal," Paul Noe (a/k/a Paul H. Noe, Paul Howe Noe, Paul Knowles, Paul Noel Randall, Paul N. Randall) told St. Laurent before testifying in 1972 before a closed session of the U.S. Senate Permanent Subcommittee on Investigations, St. Laurent recalled. The Senate panel sought to identify the extent to which organized crime had infiltrated the banking industry. Federal and state agencies from Florida, Texas, Mississippi and Alabama all had the brothers in their cross-hairs. That was then, this is now. GATCO's national advanced fee operation headquartered in Boca Raton grew tentacles reaching to California, Las Vegas, New Jersey, Mississippi and South Carolina. The boys from Boca
It may be the last chapter in the saga about these con men and brothers, whose arrest and conviction records fill rap sheets in Texas, Mississippi and Florida. St. Laurent said the pair started their crime spree in their late teens in Texas with various breaking-and-entering convictions. In the 1972 plea deal in Fort Myers, but with the blessings of the U.S. Senate, St. Laurent sent Paul Noe to a low-security federal penitentiary. At the time, brother Clifford was in a London jail for skipping out on a $700 dinner bill after failing to buy the E.H. Marley Bank with phony assets, St. Laurent said. When he returned to the United States, authorities arrested him on warrants from Alabama, Texas and Mississippi, St. Laurent said. St. Laurent added that Clifford was also convicted of grand theft and a related offense, imprisoned between 1972 and 1983 in Texas and Mississippi. "The pair was back in business plying the same exact scheme that landed them behind bars in 1972," St. Laurent said. "This time, however, Paul Noe looked pale and heavier but rattled off lies as smoothly and effortlessly as ever," St. Laurent said. He still had the knack. Fortunately, Noe didn't recognize his old nemesis and prosecutor, St. Laurent said. St. Laurent decided to play the role of dumb attorney fumbling his way through due diligence. It was Dec. 14. It was time to advance another $25,000 cash as legal fees to the Great American Trust Corp. and its claimed South Carolina parent, Great American Trust Co. On its letterhead profile at the top, GATCO extolled: "Stewardship with Integrity and Confidentiality." The deal was about to go south thanks to St. Laurent's nose for fraud and a little serendipity. Thirty years ago, St. Laurent, armed with a .38-caliber pistol, three years of undergraduate accounting and a law degree from Stetson University, worked as chief assistant State Attorney for five counties in Southwest Florida prosecuting white-collar criminals. When he kicked back into action more recently, St. Laurent bought time to review the joint venture documents that would supposedly give GATCO a 49 percent share of the Canadians' project for an $11 million payout. He contacted FBI and SEC investigators. The SEC probed GATCO and its Florida sister GATCORP as to whether they were selling unregistered securities. Brothers Noe face old nemesis
In the 1970s, the Noe brothers used Fort Lauderdale as their home base. Today, it's Boca Raton. "Boca's like having an office on Wall Street," St. Laurent said. After St. Laurent blew the whistle on Paul Noe, the pair met at a Coral Springs Starbucks for a chat. Noe bragged to St. Laurent that he's got California-based operations currently hard at work plundering victims in various schemes on the west coast, St. Laurent said. The GATCO/GATCORP advance fee approach exploits people needing large sums of venture capital money. Here, GATCO provided the critical banking vehicle. Later, Noe and his crew in April 2000 tried to incorporate another GATCO in Florida. The Secretary of State, however, rebuffed the effort, stating that a "Trust Company" requires prior approval from the Division of Banking and Finance, according to a Florida Department of State April 5, 2000, letter. So, Noe and his retinue refiled the next day as the Great American Trust Corp. In its "Venture Capital Investment Agreement," GATCORP is named as a subsidiary of the South Carolina GATCO. St. Laurent quotes Paul Noe in a candid face-to-face, tell-no-lies-please chat in Coral Springs that GATCO never had a South Carolina office. All letterheads pointed to Boca Raton. And that's a third-degree felony in Florida, St. Laurent said. Brokers were given $10,000 consulting fees to refer potential marks to GATCO, St. Laurent said. They also get a piece of the $25,000 legal fees. St. Laurent said he knows that two of these clients paid GATCO a total of $45,000. And he said that two Hungarian companies have lost at least $58,000 in advance fees. There never is a loan or VC joint venture deal closing, St. Laurent said. "The fees collected will never be paid to any attorney, as represented, and will be spent before anyone can take legal action to stop the fraud," he added. Despite St. Laurent's face-off with Noe, Noe insisted that he could prove that GATCO had funded a $250 million project, but declined to identify it, St. Laurent said. GATCO's "profile" brochure stated it has
$5 billion in assets and works with a host of name-brand international banks that pool VC for entrepreneurs. Noe then told St. Laurent that none of the advanced fee money ever goes through GATCO or GATCORP. "These guys spend the money as high rollers as fast as they get it," St. Laurent said. "It's not the money, it's the thrill of the next deal that motivates them." St. Laurent also said he's aware of other victims, including a group of Haitian businessmen in Miramar, who are out $10,000. They were waiting to sink in $25,000 more when St. Laurent and his Canadian client talked with Noe. St. Laurent, however, warned the Miramar group, advising it not to pony up any more cash. The Haitians took St. Laurent's advice. But unlike St. Laurent's French Canadian clients, the Miramar group will never see their $10,000. St. Laurent earlier demanded return of the $10,000. "You're the only person who ever put me down," St. Laurent recalled Noe telling him. "And that's the only reason we got our money back," St. Laurent said.
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Post by Admin on Apr 30, 2014 20:49:52 GMT
Wednesday, Sep 10 2003 - Son of Super Swindler
The unsettling link between a group of firms that sell financial planning services to elderly Californians and one of the most notorious con men in U.S. history
Rarely does a journalist happen upon a question that's magical, eliciting a response so extraordinary as to hint at truly untoward goings-on. For me, such a magic moment came last month, in a low-ceilinged conference room in a two-bit hotel next to the Alameda shore. I thought I was asking a routine question; actually, I'd found the passkey to a netherworld.
Southern California attorney Gary Lane had spent the previous hour pitching me, and a half-dozen older folks, on the advisability of purchasing "living trusts," legal constructs that can, in theory, allow elderly people to protect their assets from probate lawyers and tax collectors. I was investigating a type of firm popularly known as a "trust mill"; these mills generate money by advertising living-trust seminars widely in newspapers, using attorneys to sell the service of writing a living trust, and then employing hard-charging salesmen of financial services to aggressively pursue elderly attendees. In this case, Estate Planning of California, or EPoC, had advertised a dozen or so seminars in different cities around the Bay Area, and I was curious to see what was being offered.
According to the State Bar of California, attorneys who help market financial products must explain "the full extent of the lawyer's business and financial relationship with the marketer." The reason for this regulation is fairly obvious: Trust mills make most of their money by sending financial-product salesmen to customers' homes, where the salesmen hand-deliver completed legal documents. These documents can involve the control of large amounts of money, and correspondingly large sales commissions. If an attorney has a stake in those commissions, his legal advice to customers could, at least theoretically, be compromised.
Toward the end of Lane's pitch, I raised my hand.
"Could you please explain your relationship to Estate Planning of California?" I asked.
Lane said he'd answer my question later. I said it was a simple question and asked if he could briefly respond. He again said he'd answer later. I asked again. He ordered me to leave the room.
"It's a simple question," I said. "Couldn't you just briefly explain your relationship to the company?"
"I'm telling you to leave right now," said Lane, temporarily abandoning his salesman's smile. "You're trespassing."
"And I'm telling you I'd like you to answer the question," I said.
"You're trespassing," he said. "If you don't leave, I'll call the police."
Later, I discovered that in inquiring about the specifics of business relationships involving EPoC, I had broached more than a touchy subject. I'd apparently stumbled onto a link between some West Coast trust mills and the operations of one of America's more notorious crime families, a family whose leaders were recently found guilty of wire-fraud charges related to a multimillion-dollar Florida-based financial fraud scheme.
I'd encountered an operation that connected millions -- perhaps even billions -- of dollars of elderly Californians' assets to a firm called Great American Trust Co., which, a Securities and Exchange Commission complaint says, exists as a front for an investment program that was "wholly fictitious and designed solely to defraud investors of their money."
I'd nudged open a door that fed into a maze that, when followed to its end, led to men known as Super Swindlers.
Living trusts have good and proper uses, and there is no evidence I know of that EPoC or Lane has touted or sold anything but legitimate estate planning tools and financial products. Still, trust mills are notorious for high-pressure sales tactics and client complaints. So I expected Lane might be chary about answering questions.
But really: trespassing?
When I got back to my office the next day, I did a little poking into EPoC, a firm that, according to documents in the California Secretary of State's Office, has existed for just a few months. I also looked into a company called EPI-Estate Planning Inc., which Lane told us during his seminar was EPoC's "predecessor company." He said the name had been changed for business reasons, and didn't elaborate further.
EPI-Estate Planning was "an established, 4-year-old company," he assured us. "It's the same people in both companies."
Sure enough, Lane was listed as a seminar presenter in a July 2002 full-page Los Angeles Times ad for EPI-Estate Planning Inc. And the 2002-2003 alumni magazine of the University of San Diego Law School, where Lane graduated in 1969, says he had been a vice president and general counsel for EPI-Estate Planning Inc.
When I looked up EPI-Estate Planning Inc. at the California Department of Insurance, I got a whiff -- merely a whiff -- of the reasons that questions about this cluster of companies might be unwelcome. EPI-Estate Planning -- which California records say is part of a group of firms with the names EPI, EPICO, the American Association of Independent Paralegals, and AAIP, all of which pitch living trusts at seminars -- has been subject to a Department of Insurance investigation.
So far, the investigation has produced written "accusations" -- the Insurance Department's version of a regulatory complaint -- contending that, among other things, the company has sent an employee, who happened to have been a felon, into an elderly client's home, where he bullied the client into signing a release form granting access to the client's assets. The employee then used the assets to buy annuity insurance contracts without permission, paying himself thousands of dollars of commissions, the Insurance Department contends.
In another accusation, the Department of Insurance says an EPI-Estate Planning Inc. employee falsified customers' dates of birth on numerous insurance policies the customers were, actually, too old to take out.
But the disturbing linkages do not stop there.
The president of EPI-Estate Planning Inc., according to Nevada public records, is a man named Paul Noe. The California Department of Insurance accusation says that Paul Howe Noe II described himself to customers as vice president of EPI.
And Paul Howe Noe II is the son of Paul Howe Noe Sr., an international con man who is a subject of the 1973 book The Fountain Pen Conspiracy, subsequently reissued as The Super Swindlers.
According to the book, Paul Noe Sr. and his younger brother, Clifford, crafted a series of high-dollar cons during the 1960s and 1970s. Among other scams, they bought a Texas bank with money borrowed against worthless companies and then looted the bank, and used forged financial documents in an attempt to take over a British bank. British regulators foiled that takeover attempt, but not before the Noes printed phony CDs in the British bank's name and used them to defraud victims worldwide.
For their various villainies, both men have long been known to FBI agents, federal and state prosecutors, banking regulators, and flimflam victims as "Dr. Noe." FBI sources have described them as being among the most notorious con men in U.S. history.
Recent events suggest the elderly Noe brothers did not dedicate themselves wholly to good works in recent years.
Last week a North Carolina judge convicted Paul Howe Noe Sr. on charges of conspiracy and wire fraud in connection with a Boca Raton, Fla.based scheme in which the elder Noe bilked more than $1.1 million from businesses seeking venture capital financing; Clifford Noe pleaded guilty on similar charges earlier this year.
The Noe brothers, both in ailing health, await sentencing. They may spend the last of their days in prison. But their legacy apparently lives on.
Court testimony, documents introduced at trial, an array of other public records, and interviews with law enforcement officials and investigators in Florida, California, and South Carolina show an ominous connection between the East Coast scammery of the Drs. Noe and the West Coast trust-mill and annuity-sales operations linked to Paul Noe Jr.
If assertions made during the trial of Paul Noe Sr. are correct, the dubious financial empire of the Super Swindlers is directly linked to West Coast trust mills that have at least potential control over the assets of thousands of California families.
The value of those assets could run into the billions of dollars.
To understand why the Super Swindler connection could be ominous here, you need to understand some details about the types of investment fraud Paul Noe Sr., Clifford Noe, and Paul Noe Jr. have perpetrated on the East Coast.
The fraud at issue centers on a firm called Great American Trust Co., which Paul Noe Jr. registered in South Carolina in 1984. Two years later, Paul Jr. and his Uncle Clifford cooked up a scheme in Philadelphia by which they would buy an insurance company, using $100 million in forged certificates of deposit. Unfortunately, they happened to buy some of the fake CDs from an undercover FBI agent.
Clifford Noe fled to Costa Rica, but the FBI managed to lure him to New Orleans, where he was arrested and later tried on charges of conspiring to commit fraud. Paul Jr. was convicted in 1989 on five counts of aiding and abetting wire fraud.
It's unclear what happened to Great American Trust during the subsequent decade, but in the mid-1990s, Paul Sr. and Clifford, going by the names Paul Randall and Clifford Goldstein, began soliciting business on behalf of the firm from entrepreneurs unable to get standard bank financing for large-scale projects. According to a Securities and Exchange Commission complaint filed in February 2002, the brothers and four accomplices accepted fees from businesses seeking entree into a program that would provide them with venture capital.
That same month the federal government charged Noe Sr. and Clifford Noe with wire fraud. The government contended the venture capital program did not exist, and Great American Trust had almost no assets with which to back it.
In fighting the charges against Paul Noe Sr., defense attorneys argued that Great American Trust was indeed a legitimate company that handled valuable assets. In doing so, the defense revealed the link between the elder Noe's Florida-based investment fraud scheme and Paul Noe Jr.'s living-trust mill on the West Coast.
Among other things, the defense submitted as evidence a letter printed on letterhead from the American Association of Independent Paralegals showing an address in Aliso Viejo, Calif., as company headquarters. The address had also been used by Paul Noe Jr. and by EPICO, a trust mill registered under the name of Noe Jr.'s former wife, Robin Noe.
The letter said that AAIP -- which, according to public records, had links to EPI-Estate Planning Inc. -- "was in the business of preparing Revocable Living Trusts in the states of California, Arizona and Nevada." The letter went on to state that AAIP had "protected over 30,000 families with a Revocable Living Trust."
"As a service to its clients," the letter said, "AAIP offered a referral for Great American Trust to act as a Successor Trustee."
If what the letter says is true -- if Paul Noe Jr.'s associates and employees have indeed been successful in naming Great American Trust Co. as successor trustee on the living trusts his associated companies sell -- Great American Trust's potential reach is indeed staggering. Under such an arrangement, Great American Trust apparently could take control of the assets of an AAIP customer if the person became incapacitated, or died.
Advocates for the elderly contend the firms connected to Paul Noe -- including EPI-Estate Planning Inc., EPI, EPICO, and AAIP -- comprise one of the biggest trust-mill operations in California. These firms routinely take out half- and full-page advertisements -- touting two-a-day seminars week after week, year after year -- in major newspapers. Though the seminar I attended was small, Prescott Cole, attorney for California Advocates for Nursing Home Reform, told me that seminars in Southern California by EPI-Estate Planning and its related companies have sometimes drawn hundreds of elderly people who fear for their assets, and perceive a bargain in the advertised rate for creation of a living trust: $399.
Considering the scale of the second Noe generation's West Coast operation, it's possible that a Great American Trust brochure boasting that the company controlled 40,000 trusts may have contained a shade of truth. And if the letter introduced at trial linking AAIP and Great American Trust is correct, it's possible that as some elderly customers die, their assets will slip under the spell of a shell company controlled by convicted swindlers, a company whose major notable activity appears to have been complex financial fraud.
The arrangement's so elegant, it seems almost magical.
Louis St. Laurent is a man who's proud of his French Canadian heritage; he's part owner of a Florida French-language newspaper, and he has a Web site detailing his family lineage. A former Florida state prosecutor, he's now in private practice in Coral Gables, specializing in mobile-home law; he's made the papers several times in recent years, advocating on behalf of people who reside in this form of inexpensive housing. St. Laurent has also served as a nearly permanent bugaboo for the Noe brothers and their schemes.
Thirty years ago, as a Florida prosecutor, St. Laurent put Paul Noe away on charges related to the banking and securities fraud schemes profiled in Super Swindlers.
In 1963, the Noe brothers bought a Texas bank with $1.6 million they'd borrowed against shares in worthless companies with fictitious balance sheets. The Noes then looted the bank. The brothers each received five-year suspended sentences for that crime, and were placed on three years' probation.
In 1970, the brothers attempted to buy control of the London merchant bank E.H. Marley & Partners Ltd., this time using bogus certificates of deposit as collateral. The Bank of England ultimately blocked that transaction after having difficulty verifying the strength of the Noes' companies in Belize -- but not before Clifford Noe had printed millions of dollars of phony E.H. Marley certificates of deposit and opened bogus branch offices of the Marley firm all over the United States.
The illicit certificates were then used by the Noes and their associates to attempt to defraud a mining firm in Ontario, to take over and loot an Alaskan insurance company, and to establish a bogus Florida loan brokerage office, through which they stole hundreds of thousands of dollars in advance fees, among myriad other schemes.
Not long after the Noes printed the bogus British CDs, Paul Noe Sr. went to Fort Myers, Fla., to effect a similar scam: He would print $50 million in phony negotiable bonds at a local printer, then use them along with the fake CDs to convince potential victims that the Noes' businesses controlled significant assets. Paul Noe Sr. had also taken out a telephone credit card and passed the card number among his international swindler confederates, who then charged $60,000 worth of calls on the card before Noe skipped out on his phone account.
"The printer saw that there was something fishy, and came to us and showed us these negotiable bonds," St. Laurent says.
The telephone company, meanwhile, approached state law enforcement regarding the unpaid phone bill. The list of callers who'd used the phone card, St. Laurent says, eventually became a sort of Rosetta stone for a Senate committee investigating international financial fraud. "It was a master list of who's who in swindling worldwide," St. Laurent says.
Paul Noe ultimately served 10 years on charges related to wire and securities fraud, St. Laurent says.
Three decades later, in 2001, St. Laurent accompanied a French Canadian client to meet with a director of a firm calling itself Great American Trust Co. in a tawdry office conference room in Boca Raton. Laurent's client had paid $10,000 in consulting fees to a broker, hoping to obtain $11 million of venture capital financing for a housing development he had planned for a suburb of Ottawa, Canada. The capital wasn't forthcoming, and St. Laurent was accompanying his client in hopes of getting the $10,000 back.
St. Laurent stepped into the conference room, and staring him in the face was the man he'd sent to prison 30 years before, now 74 and calling himself Paul Noe Randall.
"I recognized him, he didn't recognize me," St. Laurent says of his initial encounter with Paul Noe Sr. "He called my house and asked to meet with me the next day. He wanted to assure me that my client was getting his money back, and that there was no reason to go to law enforcement. They did pay my client back, and I proceeded to turn everything over to the FBI. They had a case in Columbia, S.C.
"And they didn't know it was the famous Noe brothers until I told them."
After their encounter in the Great American Trust office, St. Laurent arranged to meet Noe at a Boca Raton Starbucks. There, St. Laurent told the con man he knew who he was. Conversation drifted to old times. And then, as tends to happen among people in their 70s, talk turned to the next generation.
St. Laurent says Noe told him that the family's West Coast operation was placing Great American Trust as successor trustee in living-trust documents it was selling to elderly people in California.
"They put a clause in there, and when the trustee dies, the successor trustee shall be Great American Trust," St. Laurent explains. "Once he got Great American Trust on those documents, he could claim his company really did have assets; sure they were successor trustee, rather than trustee, but he could claim that was a technicality. He could tell investors [that] here was a company handling 40,000 trust accounts worth $5 billion.
"Knowing Paul it could be 4,000, but that's still significant."
St. Laurent did some of his own investigating. He retrieved records connected to Paul Howe Noe II and his California ex-wife, Robin Noe. He looked at property records, which I retrieved independently, showing Paul Sr. and Paul Jr. connected to property transactions involving a Paul Noe Family Trust.
"My feelings were that his biggest operation was in California, and I tied it back into that company that was selling [living-trust] kits," St. Laurent says. "I think they were training the second generation."
I began talking to St. Laurent before Paul Noe Sr.'s recent trial had concluded. The ex-prosecutor told me he suspected Noe Sr. might submit evidence showing the connection between his son's West Coast trust mills and Great American Trust, to bolster the argument that he was running a real business, not a con game.
"But he'd put his kids at risk," St. Laurent said. "Either he's going to keep quiet to protect the kids, or he's going to go ahead and introduce it, hoping nobody makes the connection."
Two weeks later, the U.S. Attorney's Office in Columbia, S.C., faxed me the letter, submitted by Paul Noe Sr. in his own defense, that documents the connection between AAIP, the California living-trust operation, and Great American Trust, the East Coast swindle.
Although the Super Swindler connection now has been made public, I have doubts that law enforcement will investigate it thoroughly. I have doubts, even though Noe-related trust mills are already under scrutiny by the California Department of Insurance. I have doubts, even though the Noes' history of scheming appears to represent a real threat to the finances of elderly Californians.
I have my doubts, even though there are multiple regulatory agencies -- including the Attorney General's Office, the State Bar, and local district attorneys' offices -- that have the authority to attempt to curb the types of practices outlined in the Department of Insurance accusation against EPI, EPICO, Robin Noe, and Paul H. Noe II.
I doubt anyone will really look into the Noe trust mills of California because, despite summer campaign-trail rhetoric to the contrary, California is a very "business-friendly" state.
Arnold Schwarzenegger is one prominent proselyte of a commonly accepted doctrine holding that California government needs to become friendlier to business if the state's economy is to revive. Actually, though, the Noe family trust mills operate in a California environment so friendly to business that they feel no compunction about routinely buying large newspaper advertisements announcing their activities. In fact, if the Noes are any guide, California is a state so friendly to business that the only way to make it friendlier would be to adopt a policy of overweening obsequiousness. I suppose that wouldn't make much of a campaign slogan, though.
I laud the California Department of Insurance for its efforts to investigate the Noe family's California companies. But the department is fighting an uphill battle. Investigations into widespread and sophisticated financial wrongdoing require huge investments of time on the part of investigators, attorneys, and regulators, and large amounts of taxpayer money. California Insurance Commissioner John Garamendi was recently quoted in the legal newspaper the Daily Journal as saying the division that investigates consumer complaints has 17 staff vacancies and is operating under a hiring freeze because of California's budget deficit.
And the state's continuing financial problems will almost certainly lead to cuts in the staff of state regulatory agencies, making California business-friendlier still.
Pat McGinnis, director of California Advocates for Nursing Home Reform, which lobbies for stiffer laws against the financial abuse of seniors, believes state Attorney General Bill Lockyer would do more to combat elder financial abuse under current laws -- if he had the staff.
"Bill Lockyer has done more in five years than in the previous 16 years in terms of going after abuse, neglect, and fraud. He's prosecuted well over 100 cases," McGinnis says. "We got statistics in 1998 from the attorney general at the time, and there had been 10 investigations, one prosecution; there was hardly anything. We feel hopeful that Lockyer's office will take this on as well."
But McGinnis acknowledges it might be a strained hope.
"The whole enforcement system needs to be beefed up," she says. "There's no question about it: If you want to really go after people for elder fiduciary abuse, you need staff, you need time. But everybody's budgets are being cut."
It's said that Americans over 50 hold more than two-thirds of the nation's household net worth, some $7 trillion. The largest population of these elderly people resides in California and Florida, states with their fair share of sharpies anxious to exploit a friendly regulatory attitude.
Those who doubt the preceding statement should direct their attention to a September 2003 schedule of public events at the Huntington Beach Public Library. Last Saturday, a company called Estate Preservation Inc. advertised a "Living Trust Seminar" at the library, and left a number interested elders could contact.
"Thank you for calling EPI Estate Preservation Inc.," a recorded voice said when I called the number this week. The voice then directed callers to a company directory, which offered the extensions of four people with the last name Noe, including a Paul Noe.
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Post by Admin on May 1, 2014 12:00:08 GMT
Too Good To Be True: The Lure of Offshore Investing
A self-employed nutritionist was trying to pay for her elderly mother's nursing care. An executive was looking for capital to start his own business. A business consultant wanted to increase an inheritance to pay for her own retirement. A wealthy charity worker was seeking seed money for a new foundation. A software engineer and web site architect simply was investing for a better return on his money.
Those people all trusted a long-haired man in flowing robes who refused to tell them much about himself, even his real name, but persuaded them that he could help them earn huge returns, up to 200% a year, in offshore investments.
The five investors put hundreds of thousands of dollars into those offshore investments. They were told, among other things, that their money would be used to buy and sell super-secret bank notes that are traded among the world's largest financial institutions. They were warned that lawyers, accountants, bankers and law enforcement officials would deny that such investments even exist.
In the end, all five lost every penny they invested. When they protested, they were warned that if they complained to the authorities, the investors themselves could be targeted by the FBI and the IRS.
This is just one of many offshore scams and frauds going on every day, according to authorities. They ensnare a broad range of people. Some are crooks, and some are model citizens. Some are sophisticated investors, and some are novices who have never owned a stock or bond. Some are government-hating, privacy-loving conspiracy theorists trying to snatch a share of the riches they think the wealthy and powerful get from manipulating world financial markets. And some simply want to hit the big time. Take the case of software engineer and Web site designer Bob Giuli. Based in Carson City, Nevada, he has helped design Internet sites for the Los Angeles Times, Sun Microsystems, Siemens, Oracle, Motorola, Lucent and other Fortune 500 companies. He runs his own business, has interests in other companies and has been involved in many different types of investments.
He regarded himself as a sophisticated investor, and most other people would regard him as one, too -- at least until he went offshore.
For years, Giuli had heard vague things about the advantages of investing offshore. Last year, he decided it was time to learn more. He got in touch with a firm that sponsors informational seminars on offshore investing. In April 1999, Giuli went on a weeklong Caribbean cruise that featured a program of lectures and discussions on offshore investing.
One of the speakers was Taansen Fairmont Sumeru, who described his book Sovereignty Consciousness and his theory that new technology is making the traditional concept of government outdated. His message was that every person could be a world citizen -- in effect, his or her own sovereign, with no allegiance or obligations, including the requirement to pay taxes to governments formed under the old notion of nationhood.
Giuli, a high-tech entrepreneur and self-made man who believes governments can and do impose on people's natural rights, was intrigued with Sumeru, beginning with his appearance -- a slender, balding, middle-aged white American who wore silky pajamas and robes, with his hair flowing down his back and mustaches that reached down his chest. Amid the other more buttoned-down speakers who talked earnestly and urgently about investing and tax avoidance, Sumeru generated an aura of calm and peace.
After Sumeru's lecture, he and Bob Giuli talked. They went to dinner with Shirsha, the woman Sumeru calls his consort. Sumeru told Giuli about some of his own offshore investments, particularly Quantum Gold, a commodities fund based in the Bahamas that was offering 10% to 14% interest -- per month. Investors pooled their funds, Giuli was told, and an expert commodities trader managed it.
They talked about meditating, and Giuli learned that Sumeru was a longtime transcendental meditation instructor who had been living in Santa Barbara, California, for several years. Taansen Sumeru was a name he had taken for "spiritual reasons" years before, but he did not volunteer his original name or other details about his past.
"He seemed responsible, spiritual," Giuli said. "He was very charismatic." Giuli was particularly struck with the way that Sumeru (pronounced soo-MARE-oo) talked about abundance, and how accumulating wealth was part of the "natural way of the universe."
Giuli, like other investors, was impressed that Sumeru did not seem particularly concerned about making money. He told them about investments and told them how they could get in on those investments, but he never seemed pushy. He wanted to get to know Giuli personally and was keen to share ideas on how people can "evolve" to do good in the world. Even when Sumeru could not or would not answer specific questions about the investments, Giuli and others did not feel like they were about to be cheated. They figured that Sumeru did not know or care about the gritty details of how the money was made. Sumeru seemed above all that.
Back home, Giuli read Sovereignty Consciousness and began meditating. He also moved quickly to invest in Quantum Gold. He returned forms that Sumeru asked him to sign, including a non-disclosure agreement prohibiting investors from divulging details of the investment. Another form was a non-solicitation agreement requiring investors to assert that they came to Sumeru asking for information and that he had not solicited investments from them or offered investment advice.
The printed materials Sumeru sent to Giuli said in part: "An old age is dying and a new age is being born. The new age is one of the decentralization of power, and the spread of power and freedom to individuals planetwide. Congratulations on being among those rising into these higher ways of living."
Sumeru also required potential investors to write a letter about their work, their "philosophical background" and what they would do with the money. They were asked to tell him whether they practiced meditation, and if so what kind. And they were asked what they thought of his book, available online for $17. "If we feel you are okay, the Quantum packet will be sent to you," Sumeru's printed materials advised. Giuli filled out the forms, received a Quantum Gold application from Sumeru, filled that out and then mailed it back to Sumeru's address -- Mail Boxes Etc. in Santa Barbara. In June 1999, he deposited $150,000 in Quantum Gold, wiring the money to the coordinates, a Barclays Bank in New York, given him by Sumeru. He assumed Sumeru was getting a commission on his deposit, presumably at least $15,000, since materials from Quantum Gold offered 10% commissions to "intermediaries" for bringing in new deposits.
Giuli received a statement from Quantum Gold on August 10, 1999, showing that his account had risen to $166,113.93 -- an increase of more than 10%. He thought about taking some out, he said, but he consulted Sumeru, who convinced him to let it roll. The next statement, on September 10, showed $182,723.32 -- up 10%. On September 28, Giuli faxed Quantum Gold asking for $50,000 out of his account.
He never got it. He never got back any of the money he invested in Quantum Gold, interest or principal.
At least, Giuli said, he was smart enough not to put any money into another offshore investment recommended by Sumeru. It was a bank founded by Sumeru himself in 1999, as he was telling Giuli and other investors about Quantum Gold. Sumeru urged them to put money into his new bank based in the island nation of Grenada -- supposedly a better, safer and more profitable investment than Quantum Gold. The Sattva Investment Bank, the Bank of World Peace, would pay interest of up to 200% a year on certificates of deposit, Sumeru said. Giuli said many Quantum Gold investors also put money into Sattva, but he fortunately decided to wait to see how Quantum Gold performed.
Sumeru explained that Sattva Bank would earn its remarkable returns not from commodities trading, like Quantum Gold, but from "high-yield investment programs" operating in complex, little-known areas of high finance typically available only to the top banks in the world.
According to Sumeru and others who promote them through small offshore banks, these prime bank instruments, also known as "prime bank debentures," "prime bank guarantees," "medium term notes," and "standby letters of credit," allow the World Bank, the Federal Reserve and the biggest banks in the world to move money back and forth by discounting large notes they trade among themselves.
A key selling point used by Sumeru and the many others who promote prime bank instruments around the world is that governments and large banks do not want investors to know that such notes even exist. The con men's line goes something like this: "Banks will tell you these notes don't exist. Government agencies will tell you that you're being swindled. Don't listen to them. They're just trying to keep these huge profits for themselves."
The sales pitch appeals to the many people who are suspicious of governments and banks anyway and who think that "the establishment" is conspiring to hoard wealth and keep common people from getting rich, too. The con men warn them that no one will confirm the existence of prime bank notes and, sure enough, no one does.
Taansen Sumeru's Sattva Bank was supposed to have access to these high-yield bank trading programs through First International Bank of Grenada, a relatively new bank founded by Van Arthur Brink, who was known as Gilbert Ziegler when he grew up and worked in Oregon. Ziegler, 49, arrived in Grenada in 1997 traveling on a passport from the Dominion of Melchizedek, an "ecclesiastical state" that apparently exists only on the Internet, the Los Angeles Times reported in a recent story about the bank.
Ziegler came to Grenada from Hawaii, where he moved after his Oregon mortgage-banking company went out of business and he was forced into personal bankruptcy in 1994. A former church administrator and pastor who founded Christian fellowships, Ziegler also was named -- but never charged -- in an Oregon state investigation into securities fraud related to an offshore trust.
According to the Los Angeles Times, an affidavit filed in that case by a state investigator charged that Ziegler recruited investors to subscribe to an offshore newsletter for $150. Each subscriber was encouraged to recruit new subscribers. Part of the money from new subscriptions would be added to the original subscriber's offshore account. The original subscriber could never get his hands on the money, according to the affidavit, but it was supposed to grow and be passed along to the subscriber's heirs some day.
After moving to Hawaii, Ziegler worked as an offshore researcher and business consultant and founded Fidelity International Bank, registered in Nauru, an island nation of 7.7 square miles and 8,000 people in the South Pacific.
In Grenada, Ziegler purchased Grenada citizenship and changed his name to Van Arthur Brink, a name that he later said came to him in a vision while meditating. He transformed Fidelity International Bank into First International Bank of Grenada. The bank's financial stability was reportedly based on a ruby that bank documents said had an appraised value of $20 million. Officials in Grenada and elsewhere now question whether there is such a gem, whether it was worth $20 million, and whether the bank ever owned it.
First International Bank of Grenada, which quickly became known in Grenada and among investors as simply First Bank, promised annual interest rates of 200% or more on certificates of deposit, based on high-yield earnings from prime bank instruments trading. Within months, however, the bank had become a frequent target of David Marchant's investigative newsletter, Offshore Alert, based in Miami, that warns readers of offshore frauds around the world.
Marchant's newsletter alleged that First Bank was a fraud; there was no such thing as high-yield bank instruments, and there was no such thing as risk-free 200% annual returns.
Marchant accused Brink of running a Ponzi scheme, a pyramid under which money from new depositors was used to pay interest to old depositors -- and thereby draw in even more new deposits. Marchant predicted that the pyramid would collapse. (For more on Ponzi schemes)
Marchant, who has been publishing Offshore Alert since early 1997, said in an interview that he and other journalists covering the First Bank story had been contacted by the Royal Canadian Mounted Police and the FBI. He said there are "literally thousands" of similar offshore frauds going on around the world at any given time.
In response to Marchant, Brink issued a long written refutation and counterattack, and accused Marchant of being part of a conspiracy by banks and governments to discredit First Bank, silence Brink and keep their secrets of high-yield prime bank instruments. Brink said he had proof -- although he did not provide it -- that Marchant was being paid, apparently by the FBI, to write articles criticizing First Bank.
In the autumn of 1999, Brink resigned as chairman of First Bank and moved to Uganda, where he said he was going to establish humanitarian aid programs and help build a new monetary system. He has since been accused of taking tens of millions of dollars with him.
At about the same time that Brink was leaving Grenada, First Bank and its sub-banks, including Sattva Bank, stopped paying interest to depositors. That was also about the same time that Quantum Gold stopped paying its investors. Some investors who found both investments through Sumeru wondered if Quantum Gold was somehow linked to First Bank. But Sumeru said in an interview that there was no business connection between Quantum Gold and Sattva Bank; the only link was that he had told investors about both opportunities.
In the months since, many investors -- although not all -- asked Sumeru to help them get their money back from Quantum Gold, Sattva or both. Some blamed him for their losses. In response, he insisted that he had not advised, encouraged or recommended anything, and said he had not guaranteed they would make money. He told some of them they should not have put all their eggs in one basket.
Gigi Carroll, a travel agent who arranged transportation and hotels for participants in some offshore information seminars where Sumeru spoke, laughed at Sumeru's assertions that he did not actively advise or encourage people to invest. "He solicited people. People came to him, and he made recommendations," she said in a telephone interview. She speculated that the reason he required people to sign a nonsolicitation agreement was to protect himself from securities laws.
" I always wondered why he wanted those letters if he wasn't soliciting," she said.
Carroll said she invested $10,000 in Quantum Gold. She heard Sumeru and his clients talking about how much money they were earning. She didn't realize until it was too late that those profits were all on paper. "I got beautiful invoices every month. On paper it was going up," she said. But that's all she ever got -- beautiful invoices. She never got any of her money back.
A number of people, including Bob Giuli, said they were suffering not only financial losses but also "spiritual abuse." He believed he had found in Sumeru a kindred soul, someone who was different than most financial advisers, someone who could be trusted and would never intentionally hurt others, much less steal their money.
One woman who invested in Quantum Gold said she trusted Sumeru because of his transcendental meditation connections. Carole Speight, who grew up in Dallas and moved to Hawaii several years ago to start a TM center, said a fellow meditator in Hawaii introduced her to Sumeru. The two of them told her about Quantum Gold.
Speight, who prefers to be called Lalita, admitted that she was and is an inexperienced, unsophisticated investor. But her 90-year-old mother needed extensive nursing and medical care, and Lalita was afraid her mother's $30,000 in life savings would quickly be eaten up. On the other hand, Quantum Gold's promised 10% to 14% monthly returns would provide a steady cash flow for her mother's expenses. So Lalita put her mother's $30,000 savings, plus another $10,000 she borrowed against a credit card, into Quantum Gold. She believed her mother would receive at least $4,000 a month from that $40,000 investment.
Lalita, who works as an herbal nutritionist and no longer practices TM, never received any monthly payments. When she wrote to Sumeru asking what had happened, he wrote back that he was not at fault. "The caveat emptor was very clear in the contract," he told her. "No guarantees. Period. Each investor was given the responsibility upon himself or herself to accept the risk. The risk was clearly stated. By speaking in a poisonous way to me, you are only amusing and saddening me. You are biting the very hand that could be a blessing to you."
Sumeru blamed the Quantum Gold problems on "dark forces." When Lalita suggested hiring a private investigator, Sumeru told her that he already had arranged for an investigator to work on the case, but could not give her any details:
"All I know is that a recent acquaintance who is on a very, very high level in the trading and financial world was sympathetic to my description of what happened to the Q investors, and he called one of his very highly placed investigators. He did this only on the condition that his name stay out of any mention to anyone else, because he has a powerful career and has no direct concern with our problem."
Finally, Sumeru scolded her: "Rather than contributing to the solution, you have simply consumed my time, and you have shown no respect for the blessings I have been trying to bring to the world."
Lalita said she talked with the FBI in Hawaii, but decided against pursuing criminal charges -- for now -- because it is still difficult for her to believe that she was intentionally cheated. "I thought, these people can't be criminals, they're my friends. They're meditators," she said.
Besides Sumeru's laid-back, peace-and-love appeal, some investors were all too eager to disdain the normal returns available to the unadventurous and supposedly uninformed masses -- people who put their money into traditional banks, mutual funds and even a raging bull market.
A Santa Barbara business consultant who inherited $150,000 wanted to put it away for her retirement, but she decided traditional bank returns and mutual funds did not pay enough. She talked to several stockbrokers, but didn't trust them. Speaking on the condition of anonymity, she recalled, "I was drawn in by the spiritual aura of Taansen."
She also believed what he told her about prime bank notes. It made sense to her that the government would deny that prime bank notes exist. She was convinced that government and bank conspiracies keep everyday people poor and ignorant, and the warnings about prime bank notes were mere scare tactics so that the banks would not have to share those profits with anyone else.
She said that after she invested in Sattva Bank, she began recruiting friends to invest. Sumeru told her she would be rewarded as a registered contractor (RC), and would receive commissions. A few weeks later, after she reckoned that she would be owed at least $25,000 in commissions, she asked Sumeru when she would start getting the money. He told her that he and other bank officials had decided she could not be an RC after all. "He told me I was not spiritually evolved enough," she said.
Incredibly, she said she is preparing to invest $50,000 in another offshore program promising returns of 100% or more a year from prime bank note trading. Yes, she knows that the government says prime bank notes do not exist, but she said, "I do believe they exist." Her $150,000 loss the first time, she insisted, was merely bad luck, the result of investing with the wrong people. On the new investment, she said, she had found the right people, people she could trust. Another California investor, speaking on the condition of anonymity, said the thing that attracted him to Sattva Bank was Sumeru's assurance that the bank's emphasis was going to be on attracting investors who wanted to use their high returns for good works.
" It was philanthropic. It was a way to make money and to do good," said the investor, who has done considerable volunteer work with charities and foundations. "One person wanted to start a cancer clinic, and they thought the bank would help." Other investors were raising money for foundations and charitable programs to help children, the poor and deprived ethnic minorities, he said.
"A lot of people today are trying to reconcile spirituality and money. Here's a guy who comes along and says he's figured that out. They take your vision or your project you're involved with, and they describe how you can accomplish that. It's a pretty compelling thing," he said.
The investor said he had hoped to make enough money to finance a new charitable foundation of his own. He admitted, however, that 200% annual returns also were attractive to him as a personal investor, and so was Sumeru's offer for each investor to become a "conduit" or agent who could get commissions for getting their friends and relatives to make deposits, too.
"The bank attracted a certain kind of people -- naïve, for sure, but they were interested in putting forward some kind of social project," the California investor said. "They played upon the good intentions of the investors. It was so insidious."
He said that when he complained to Sumeru and other officials of Sattva Bank, they claimed that they had lost their money, too, and warned him that asking questions could jeopardize the return of everybody's money. "That enabled them to say they were in the same boat we were in. There was a lot of blaming the victims. They said, ‘Because you're asking questions, you're creating fear.' Their response was, ‘That hurts what we're trying to do.'"
He concluded: "I can't tell you how many people I've heard from who have been devastated, common people -- people all over the world, people living on farms, people trying to send their kids to college." Unhappy investors set up e-mailing lists and newsgroups to share information and try to lay the groundwork for an effort to recover their money. Many of the postings railed against Brink and Sumeru, and there was considerable discussion about Quantum Gold's assertions that the money apparently had been taken by the fund's commodities trader, identified by Quantum Gold as Peter Dennis, who supposedly was handling the Quantum Gold money.
A number of e-mail updates from Quantum Gold, signed only by the "administration," reported on efforts to track down Peter Dennis, urged investors to be patient, cautioned against asking too many questions for fear of slowing down the investigation, and ultimately asked investors to send in more money to help pay for the recovery.
One investor warned fellow victims not to be lulled by assurances that Sumeru or anyone else involved in Quantum Gold really was doing anything to get the money back: "If you think those who lost your money are doing anything on your behalf no matter what it looks like, consider this. Only if they appear to be doing something can they blame the problem on others. Deferring responsibility, accountability and authority has been the name of the game."
One newsgroup posting that created a buzz was from a non-investor who identified himself as Philippe Carrier, 23, a Canadian who had worked for First International Bank of Grenada in 1997 and 1998. He said he had been managing a Mail Boxes Etc. in Montreal when he was recruited by a friend working at First Bank to come down and help set up a comparable in-house business services operation for the bank: Mailing, faxing, copying and record-keeping.
Carrier's posting described how Van Brink had come to Grenada with his bank, but without a real administrative structure. Brink teamed up with Larry Barnabe, a Canadian who had moved to Grenada. Carrier said Barnabe and Brink set up a network of companies that brought more than $100 million into First International Bank of Grenada.
These companies included the International Deposit Insurance Corporation (IDIC), whose name, Carrier said, was chosen because it sounded like the United States' Federal Deposit Insurance Corporation. In marketing materials for First Bank and its sub-banks, including Sattva Bank, IDIC is portrayed as an insurer that would protect investors from losing their money. "Each account at the bank is unequivocally insured through IDIC," promotional documents claimed. "IDIC guarantees the safety of all principal and interest, while requiring larger cash reserves and enforcing more conservative policies than its U.S. sound-alike."
Carrier, however, maintained -- and many investors have come to agree -- that IDIC was a shell and a sham that was set up by Brink solely to lure in cautious investors and was never intended to insure anyone's deposits.
Other new companies established by Brink and Barnabe included one that set up offshore investment seminars. Sumeru began appearing at those seminars, talking about Sovereignty Consciousness and Sattva Bank. Another company was established to pay commissions to investors who acted as independent contractors (ICs) and brought in new deposits: If an IC brought in a friend who deposited $100,000 and left it in First Bank for a year, for example, the IC could end up with $24,000 in commissions.
Another company collected fees from investors to register them in Grenada as international business corporations (IBCs) before they made their offshore deposits. Yet another company, World Investors Stock Exchange (WISE), was supposed to be a stock exchange only for companies that contributed to improving the world. Carrier said WISE was created solely as another avenue to bring in money from investors. Unlike a typical stock exchange where investors buy individual shares that are not guaranteed, investors in WISE could buy shares whose principal and interest were totally guaranteed by a Stock Value Bank Guarantee (SVBG), an instrument provided by First Bank.
"A percentage of every share sold on WISE is set aside in a deposit-insured bank to guarantee a return of principal and reasonable earnings," WISE documents said. A three-year SVBG guaranteed that the investor would be returned 119% of the original investment, while the five-year SVBG guaranteed 135% and the 10-year SVBG guaranteed 211%.
After First Bank began getting bad publicity, Carrier said, Brink took new deposits into a new sub-bank named Crown Meridian so that investors would not necessarily know that their money was going into First Bank. Later, Brink began collaborating with other people, such as Sumeru, to set up more sub-banks; eventually there were 15 to 20 sub-banks, including Sattva Bank, Carrier said.
Carrier's posting in the newsgroup created a flurry of responses. Some said it was a plausible look inside Brink's operation. Others made disparaging remarks about Carrier and said his claims could not be true. Brink himself posted a 16,000-word response, concluding with ridicule for Carrier's suggestion that unhappy investors call the FBI. "And by so doing, cooperate in making certain that everyone suffers a maximum amount of financial damage," Brink wrote.
In a subsequent telephone interview for this story, Carrier added details to his previous statement. "All the time I was there I never saw them do any actual banking. There was no banking department in the bank," he said.
Carrier, now back in Canada working in an administrative job for a pharmaceutical research firm, said First Bank's handful of locally hired clerks did keep busy -- recording new deposits, paying commissions to ICs and, in the beginning at least, sending out interest payments to investors. But he doesn't think there was any real interest. Instead, he said, he believes both IC commissions and interest payments came out of new deposits.
"I think it was a pyramid," he said. He said he never saw any evidence of any prime bank notes trading, or any other kind of trading, investments or business deals by the bank. The sole focus was to bring in more deposits, he said, rather than trying to make money from those deposits.
Carrier left Grenada not because he was troubled by what was going on at First Bank, but because he was fired after complaining that he wasn't getting paid on time. Brink supporters in the newsgroups tried to discredit him by claiming he had been fired for theft and had a prison record, but Carrier denied all the accusations.
Looking back, he said he regrets some of the things he did in Grenada, such as helping investors do paperwork that would allow them to evade U.S. taxes, and helping train ICs to sell onshore -- a violation of U.S. law since they were unlicensed and were promoting unregistered securities. "In my heart I didn't do anything wrong. I didn't do anything illegal. But I was part of a system that was illegal," he said.
Carrier predicted that Brink would probably never go to prison for stealing money. "Nobody can ever prove he took any money. You won't get him on charges that he stole any money. But you can get him for organizing systems that showed people how to defraud the government, and how to evade their taxes," Carrier said.
Carrier said he has not been in contact with the FBI or other authorities, but said he knows at least one person who worked at First Bank and is cooperating with the FBI. If asked, he said, he would be willing to testify to everything he wrote in his newsgroup e-mail.
Last August, Grenada's government took over First Bank operations. The government announced that funds were missing, and that it was cooperating in an investigation with the U.S. Department of Justice and the FBI.
For the first time, Grenada government officials publicly expressed doubt about First Bank. They admitted to the Associated Press that they did not know if the bank's reported income for 1999 --$26 billion -- was accurate. If true, that would have made it the most profitable company in the world. The government official put in charge of the bank's operations said it appeared that millions had been taken out of First Bank by Brink and various associates.
Bob Giuli and other investors hired a private investigator, Lyle Smith, president of Intercontinental Capital Management, Ltd., of Sacramento, California, who specializes in recovering foreign assets. Giuli, who has prepared a 105-page declaration for use in any legal action, said he hopes that criminal charges can be brought against Sumeru. He said he had not been in contact with the FBI, but other U.S. investors have told him they are cooperating with authorities.
"It is my testimony that the net effect of solicitations of Dr. Taansen Fairmont Sumeru, Ph.D., is in violation of United States Code in multiple instances, he did profit by these transactions, that he did collect money through the mails, and last that he has, individually or in concert with others, failed to honor written warranties, failing to return invested monies," Giuli said in his declaration.
However, the private investigator, Lyle Smith, said he will concentrate on recovering assets. He said he was uncertain about what charges could be brought against Sumeru. "He never touched any money directly. He knew better than that," Smith said.
Giuli and other investors also hired a Grenada law firm and obtained an order from the Grenada Supreme Court that restrains Brink, Sumeru, Quantum Gold, First Bank, Sattva Bank and others from spending any of the up to $372 million that the investors say they invested.
In a telephone interview and in e-mail exchanges this fall, Sumeru seemed bewildered that the investments have gone sour, and that anyone would blame him. He said he does not feel that he has done anything wrong. He emphasized that he has not fled, that he is still in Santa Barbara, and that he is still talking to investors. However, about a month later, Sumeru was making plans to leave the country in search of a "spiritual community" where he could settle.
Sumeru insisted that he had no idea where the missing money might be. He said he still believes that prime bank notes are real, and it is possible -- as Brink claims -- that the money was secretly seized by governments and big banks that want to keep the public from learning about prime bank notes.
However, Sumeru also said he reluctantly accepts the possibility that Brink absconded with money from First Bank. "Some people are firmly convinced he is a crook," Sumeru said in an e-mail. "Others are firmly convinced he is a victim. I really don't know. I wish I did. Time well tell."
No matter who took the money, Sumeru said he, too, was a victim who had lost money. Unlike investors in his bank, however, Sumeru refused to divulge any particulars: How much he had invested, how much he had withdrawn in commissions or interest, and how much he was owed in commissions and interest.
Brink, in an exchange of e-mails from Uganda for this article, said he did not have any of the money. He intimated that the money had been spirited away and that he had been defamed in the media as part of a conspiracy that included American intelligence agents and the Organization for Economic Cooperation and Development. The Paris-based OECD, made up of 29 of the world's most industrialized countries, has been spearheading an international effort to clean up banking practices in tax havens known for secrecy, fraud and money-laundering.
In response to a question about whether investors would ever get their money back, Brink said, "Not if the forces (OECD-oriented operatives/sympathizers) that wish to crush private offshore banking have their way."
Brink said it is understandable for Sumeru to suspect him of taking the missing money: "Taansen is a genuinely sincere man and, I believe, an honest man. Taansen now suggests that it now appears that I ran off with a lot of money? My guess is that he's in the infancy of his awakening to how truth is mishandled in the press. But since he's a good man and an intelligent man, he'll figure it out on his own soon enough."
Brink also suggested that Sumeru might be distancing himself from Brink publicly because Sumeru would need credibility before offering any new investment opportunities to friends and acquaintances. After being interviewed for this article, Sumeru put forth a number of friends and business associates to vouch for his character. Even those who had invested with Quantum Gold or Sattva Bank and lost their money said they did not blame Sumeru. But everyone who spoke up for Sumeru had one thing in common with the unhappy investors: they had all lost money.
One man, Ed Spencer, who said he is an Alaska-based businessman and traveling Baptist evangelist, said he bought CDs in Sattva Bank. He said he believes he may have been defrauded, but added, "Taansen had nothing to do with it."
"The problem apparently was with First Bank's management," Spencer said.
An Australian woman, a mother of two young children who said she manages money she inherited, said she had been friendly with Sumeru for several years. Speaking on the condition of anonymity, she said Sumeru had "referred" her to Quantum Gold and received a commission from her deposit. But she emphasized that she did not blame him for what appears to be a lost investment. She said other investors have made Sumeru out to be the bad guy because of his appearance and his beliefs.
"Taansen is being targeted irresponsibly, simply because he is different," she said. "I'm not happy with my investment choices, but I'm willing to accept the responsibility for my decisions." She said she is not convinced that Bob Giuli or anyone else can produce any evidence against Sumeru.
So where are the missing funds from Quantum Gold, First International Bank of Grenada and Sattva Bank? Where's the money? Who can answer the questions about what happened to the Quantum Gold and First Bank money? Bob Giuli believes Taansen Sumeru can answer all the questions.
But Taansen Sumeru is not answering any more questions. In his last telephone interview for this story, he said he had been "bankrupted" by the Quantum Gold and Sattva Bank scandals and had been forced to give up his Santa Barbara home because he could no longer afford to live there. He said he was "going traveling," planning to visit a series of "spiritual communities" around the world in hopes of finding one where he would settle.
The Santa Barbara woman who lost $150,000 in Sattva Bank said she believes Sumeru is trying to avoid prosecution. "I think he is a scared little rabbit," she said.
"The problem is we trusted him," Bob Giuli said. "We had confidence in him. But the word ‘con' comes from confidence."
Giuli knows it will be difficult to find any of the missing money, let alone retrieve it, and it will be difficult to bring criminal charges against Sumeru or Brink or anyone else. "The secrecy laws are rigid in these countries," he said. "The problem is that the laws not only protect the innocent, but they also protect the guilty."
The paper trail is convoluted, and parts of it are either missing or obscured by the offshore banking structures that allow fraud to hide behind secrecy laws. A PricewaterhouseCoopers creditor's liquidation report contains the results of an analysis of the hard drive taken from Van Brink's laptop, which shows that about 80% of the settings on his browser pointed to porn sites. They also discovered the bogus assets "assignment" to FIBG of the "carved red ruby" which was said to be known as "Boy on a Water Buffalo".
$470,403 of assets have been recovered so far and it is estimated that "net realizations before professional fees and other administrative costs will range from a high of $7.4 million to a low of $1.7 million". They also estimate that $125 million of clients' principal was deposited at FIBG and its many sub-banks, which is down from the estimate of $206 million when the liquidation began.
The liquidator says that finding out what happened to clients' funds and establishing accurate figures for FIBG's assets and liabilities has been difficult because of the chaos in which it was operated. Many records have disappeared, along with the people who operated the bank.
Offshore Alert says that Van Brink is currently hiding out in Uganda.
Authorities say it is difficult to recover money lost in offshore scams and difficult to send the con men to prison. Frauds are often hard to prove, with convoluted paper trails stretching across many different jurisdictions. Offshore scams have become so prevalent that authorities simply don't have the resources to prosecute them all.
In addition, many victims are reluctant to help authorities. Some refuse to believe they were conned. Some are too embarrassed to admit it. And many fear that they will get in trouble themselves -- for evading taxes, for example, or illegally hiding assets -- if they step forward.
A number of investors who lost money in Quantum Gold or Sattva Bank said they were considering going to law enforcement authorities, but they were afraid.
One investor went so far as to telephone a regional FBI office in hopes of asking some anonymous questions to see if he had violated any laws by investing offshore. He got a special agent on the phone, but when the agent put him on hold the investor hung up in a panic, afraid that his call was being traced.
The investor had been told that because he had invested offshore, he would find himself in trouble, too. He was fearful that cooperating with authorities would lead the IRS to begin combing through his returns for recent years, and would lead the FBI to target him for money laundering.
The investor had been told that even if authorities recovered some of the money, they would first use it to defray the costs of their own investigation rather than return it to the people who had been bilked.
Nonsense, says the FBI.
Roy Handley, supervisor of the money-laundering unit at FBI headquarters in Washington, said someone who has been cheated in an offshore scam is not automatically viewed as a crook who is trying to hide assets or evade taxes. "We will treat that person as a victim," he said in an interview. "If a victim is upfront and open with me, I will do all I can to help."
He said victims have little to fear if they earn their money honestly, meet U.S. bank reporting requirements when moving money offshore and intend to pay their taxes on offshore returns. "It's the intent of the person involved in the situation that determines whether there is any illegality," Handley said.
He said investors moving money offshore in search of higher returns are not automatically suspected of money laundering. The laws on money laundering, he said, cover attempts to hide money earned from specific unlawful activities, such as drugs, prostitution or embezzlement.
And money laundering, Handley said, does not necessarily mean that the money has gone offshore. It covers putting the proceeds of the illegal activities into any bank, whether in the United States or any other country.
At the same time, he said, even victims who have dirty hands should be advised to come forward. It's better to cooperate and make a deal, he said, than to try to hide and then accept stiffer consequences when caught. "If you were involved in something illegal, you need to talk to us about it now instead of later," he said. "The first one on the bus gets the best seat. The first victims to come to me are usually the clean victims."
Handley said con men who warn their victims that they will get into trouble themselves and won't get their money back anyway are playing into the prejudices of people who are wary of the power of the government to invade their privacy.
At the same time, he conceded that there are no guarantees that victims will recover any of their money. It is sometimes difficult to determine who the investors are or how much each invested. Offshore banking secrecy laws often hinder investigations, and the money frequently has simply disappeared with the fraudsters.
"We want to help people," Handley said, "and if that includes getting their money back, all the better. But there are no promises."
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Post by Admin on May 1, 2014 15:06:20 GMT
Louis Lesser is the man Donald Trump called "The Legend". Lou was mentor to Warren Buffet, landlord of Howard Hughes' aircraft facilities, partners with JFK in Barrington Plaza, and was the biggest developer in the history of the western United States. Louis Lesser was the Los Angeles County Civil Defense Commissioner who also privately owned the high-end nuclear fallout shelters, giving him tremendous influence in circles of wealth and power.
Louis Lesser was also partners with the notorious Meyer Lansky. “Louis Lesser’s Life Story” is the story of how Lansky’s criminal network of the 20th Century is finally brought down, as part of the quest for the biographical “Louis Lesser’s Life Story”, which is called “The Legend”. Writing the bigger “Louis Lesser’s Life Story” is therefore antivirtual like my Griffith Park, and is soon to be completed.
Louis Lesser’s son, Craig Lesser, was the operational manager of the Adi Da Cult, of note for allegations in legal filings against Craig Lesser for overseeing the kidnapping, drugging, sexual assault, and attempted brainwashing its victims, including minors. Craig Lesser’s Death Certificate misspells his name and still lists the cause of death as “pending investigation", an investigation started in 2005. Craig Lesser was partners and best friends with the notorious Robert N. Rooks and David Korem. Korem is the son of David Wellington, called “the world’s greatest con artist” by a Wall Street Journal reporter in 1972.
David Wellington escaped federal prison and deliberately got himself arrested in Mexico, in order to fake a death in the misbelief that this would call off the federal manhunt for him. Korem and Wellington created the first micronation (which according to Frances Ford Coppola in Godfather II, was dreamed up by Meyer Lansky, portrayed as the character Hyman Roth, after Lansky’s failed take-over of Cuba by mobsters).
A micronation is an offshore location outside the law enforcement jurisdiction of any country, and therefore an ideal location for criminal enterprises to flourish. The micronation was called “Dominion of Melchizedek” (a name in the Bible and pronounced “Mel-Cheesy-Dick”, a crude sexual joke about their friend Melvin having sex with a prostitute with a yeast infection). The first president of Melchizedek was one of polygamist Korem’s “wives”, his business partner, Elvira G. Gamboa.
Elvira Gamboa was named one of the world’s most notable fraudsters by a Nigerian Magazine in 2011, for invention of the Nigerian Prince Email scam and other scams. The scam first appeared as “the wife of a Filipino General”, before it was a “Nigerian Prince”. Gamboa uses hundreds of aliases, alias Pearlasia Gamboa, Princess Bae Catiguman, and hundreds of others, constantly permuting the names and letters in them, e.g., “Perla”, as in “Perla Mayor”. She also adds “last names”, such as “Rn”, which when capitalized, read “RN”, creating what she believes is cover for pretending to be a registered nurse without having a license.
Korem and Gamboa have pretended to be estranged husband and wife for many years, and their attorneys, such as Chris Cannon in San Francisco, aid and abet this, as well as laundering money for them. Korem and Gamboa had a son, Hazemach, which means “branch”. Korem uses the alias “Branch Vinedresser”, implying that Wellington is the “Vinedresser”, or Christ himself, and Korem is his son, the son of the son of God. Korem pretends to be descended from King David, and still uses his davidsroyalhouse@hotmail.com email address. Gamboa claims to have been similarly resurrected, and pretends to believe herself, as at the end of the SF Weekly story Fantasy Island. If you blow up the image of that cover story, you will see an “FBI” on the jackets of those hunting for Gamboa and her bearded father-in-law, David Wellington.
The Anti-Mafia Directorate in Rome has also been hunting for Gamboa and Korem, and the elusive leaders of the International Monetary Reserve of Melchizedek. That story begins, “It sounds like a science fiction, and would break the bank as a Hollywood Blockbuster”. The Italian newspaper La Republica reports IMR as being “one of the most diabolical schemes in memory”, but that its leaders, such as its president Elvira Gamboa, and David Korem, remain elusive. Louis Lesser was the chair of the board of directors of IMR at the time Elvira Gamboa was its president.
Robert N. Rooks was indicted by a Nevada Grand Jury for Melchizedek crimes in 2000, but all the witnesses committed suicide. He was then sued for fraud by the SEC in 2002, and banned from ever selling securities, but he continues to do so out in the open, claiming protection from his specifically named person “next to Eric Holder”, “Persi” in California Senator Diane Feinstein’s office, Assistant US Attorney Richard Robinson, LAPD Detective Barragan, and numerous other specifically named law enforcement agents whose names have not been online. Rooks claims to communicate to corrupt law enforcement officials via specifically named “buffers”, such as Charles Marlin of Detroit, as well via specific attorneys operating out of San Mateo County, CA, and others whose names have not been online. Rooks openly pretended to try to purchase the Silverdome with his illegal United Assurance Company, to turn it into an entertainment center under his Allied Artists Entertainment Group. This drew media attention and the ire of sports fans, but no mention was made of his criminal indictment, fraud suit brought against him by the SEC, nor of the fact that United Assurance Company is an illegal insurance company.
Robert Rooks claims to head a Detroit based organized crime network with Charles Marlin, and claims to have pooled $9.3 Billion in organized crime money to gain undue influence with law enforcement and others in government. He claims to hold it with his son, Kenta Rooks, and wife, Hiroko Sagawa, in an “International Synergy Holding Company”. Rooks claims the money is held in US Treasury Bonds under CUSIP # 909423-AA3, and ISIN # US912810FF04, and others specified numbers. Rooks claims that it is his association with these specifically named law enforcement officials that allows him to issue "insurance binders" under his unlicensed insurance company, United Assurance Company, Ltd., operating in the open in Los Angeles with the full knowledge of the LAPD Chief Charlie Beck, the California Insurance Commissioner, and Asst. US Attorney Richard Robinson. Rooks claims that he has a deal with Assistant US Attorney Richard Robinson, with the California Insurance Commissioner, and with LAPD, that if he does not use the word "premium", he can rob people by selling them illegal insurance binders, e.g., by selling the insurance binder as a package with securities in his phony Allied Artists Pictures Corporation. In November 2012, LAPD Chief Beck wrote a letter that he was personally investigating in the internal affairs review of the LAPD investigation of United Assurance Company, and found nothing wrong with LAPD allowing it to continue to operate and keep the money (by transferring it to Rooks' Melchizedek president, Elvira Gamboa, in her illegal BankAsia AG) that it made from selling insurance binders with shares of Allied Artists. Rooks wife, Hiroko Sagawa, and son, Kenta Rooks, openly try to sell the UAC insurance binders for Rooks in Hollywood.
Internationally Synergy Holding Company also “holds” people against their will, under orders of alternative medicine “Dr.” David Korem and "nurse" Pearlasia Gamboa. Korem and Gamboa claim to practice alternative medicine and have authority to order “alternative medicine involuntary holds and transfers”. Since it is alternative medicine, it does not need a license to “hold, transfer, and treat” people against their will. The holds and transfers are implemented by Filipino "psychiatric alternative medicine nurses" operating under the name "Premier Home Health". It includes Arsenio Tabula, Roque Gatchalian Lallanas, Emmanuel Thomas Cruz, Domingo of 2090 Nottaway San Jose, and of course, Perla Mayor, and Fei Rn (Haling Fei is Gamboa's personal physician in Redwood City). Premier Home Health operates from an office in San Jose without a license, with the blessing of the San Jose Police Department.
Their alternative medicine treatments include an electrical “energy medicine”, specifically a “Christian Good Samaritan” treatment called “tough love”, administered by Filipino alternative medicine nurse Regino “Red” Calub, who wears a bullet proof vest when administering the tough love with his Filipino . Calub also administers the holds in Motel 6 in San Jose, again with the blessing of San Jose Police Department.
David Korem’s girlfriend is Mei Ping Wu, who operates Korem’s Chinese and Kyrgyzstani smuggling operation from 805 Veterans Blvd in Redwood City CA. Korem was hired by elements in the Chinese government to assist China in doing pump and dumps of companies such as Yasheng Group, Silk Route Museum, and Yasheng Eco Trade. Yasheng Group Chairman Zhou Chang Sheng hired Korem to try to get his company on a major stock exchange to enrich them in an initial stock offering. In June 2011, Zhou was videotaped meeting with Korem, and the notorious Israeli and Russian organized crime figures, Moshe Schnapp, Yossi Attia, Greg Rubin, and others. Yasheng Group vice president Michael Larivee keeps scanned images of Korem’s massive securities frauds as blackmail material if Zhou, Wu, or Korem were to cross him on Larivee’s own operations in San Mateo County CA, Kyrgyzstan, China, and San Bernardino County CA.
Robert Rooks signed an agreement with Kimball Dean Richards to merge Elvira Gamboa's Merit Diversified with Richards' Allied Artists, but the deal went sour, when hoodlum want-to-be actor turned singer David Hasselhoff would only work for Richards, not for Rooks. Richards was indicted for Allied Artists in the 1980's, as well as pleading regarding solicitation of murder and wiretapping sheriff's offices. In 2006, Richards and his attorney, Ashley Posner, were on the Board of Directors of the San Gabriel Valley Transit Authority, who issued fake Department of Homeland Security cards for Bo Stephan Eriksson and his Uppsala Mafia. They used the cards to waltz through a huge pack of news cameras and through the LA County Sheriff police cordon, to walk out with evidence in Eriksson's crashed Enzo Ferrari, in Malibu. Richards and Posner were "punished" only by taking away their website ending in ".gov", similar to Richards' punishment for soliciting murder and wiretapping sheriff’s offices - one year probation and no jail time. Eriksson is also known for the largest video game fraud in history, Gizmondo. A federal judge called Richards "the biggest liar who ever walked into my courtroom".
Louis Lesser broke his shoulder in 2009, and was moved into assisted living from the hospital until his shoulder healed. Retired California Sr. Senator James Pasqual Bettio asked me to help Louis Lesser organize and recover his complex financial documents, most of which were lost, and to help him recover from elder abuse.
Louis Lesser was being drugged against his will with Phenobarbital and other psychotropics, causing the temporary appearance of dementia. The Filipino owned and operated assisted living complex refused to tell him what or why he was given the drugs. When he refused to take them, they threatened that they and his family would put him out on the street with the broken shoulder and nothing. When he asked where his hundreds of thousands or millions in valuable possessions were, they told him they were in the basement garage storage cage. When the “nurse” left, Louis Lesser told me they were lying. I checked, and nothing was there.
Some of Louis Lesser’s securities and other assets were controlled by "transfer agent" David Korehem, another of the many aliases of David Korem. Billionaire attorney and LA Clippers owner Donald Sterling started taking out ¼ page ads in the LA times that Sterling, not Lesser, had developed Sterling Towers. I saw Arthur Anderson’s personal audit that Louis Lesser developed them as Lesser Towers. The former president of the San Diego State Bar had conspired with a bankruptcy court to liquidate Louis Lesser’s company, Tri National Development, which owned Inmobiliaria, famous as the Catholic Church’s company in Godfather III. Louis Lesser had filed for a reorganization bankruptcy to hold off creditors, while it reorganized assets worth $80 Million, but on paper for $20 Million. The assets included owning most of the area around Ensenada Baja California. The attorneys, operating out of San Diego, liquidated the assets for pennies on the dollar, kept $14 Million for themselves, and Lou got nothing, not even an explanation or returned correspondence.
Louis Lesser was in a different major news story every month for over a decade, but in about 1970, suddenly dropped out after a story in LA Times about Lou having a fight with Jimmy Hoffa’s attorney over a Teamsters deal involving Lou’s partnership with Meyer Lansky.
Louis Lesser was former owner of Zenith Refinery, which was taken over by a group sometimes known as the Hong Kong Black Hand, and is now involved in the pharmaceutical business as QPL, and other names.
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