Title: Four Executives of Phantom Grenada Bank Face Prison Time and Millions in Fines for $170M Tax Evasion and Fraud Scheme

Background

In a landmark case, four executives of the deceptive First International Bank of Grenada (FIB) were convicted of defrauding over $170 million from thousands of unsuspecting investors worldwide. The sham bank, which crumbled in 2000, will now see its top officers serve jail time and pay exorbitant fines.

Bank’s Deceptive Practices

The dismantled bank, which pretended to be a legitimate financial institution, used counterfeit documents and promised unrealistic returns of up to 300% to lure investors. FIB’s foundational falsehood claimed their assets were backed by a 10,000-carat ruby valued at $20 million. However, the ruby belonged to a Californian man unacquainted with the bank or its officers [1].

Convicted Executives

Among those held responsible are:

1. An executive, who received an eight-year prison sentence and a court order to pay over $32 million in restitution [2].
2. Three other bank executives, who must pay more than $26 million in restitution; prison terms yet to be determined [2].

The FIB’s founder, former mortgage banker Gilbert Ziegler, died in 2005 while awaiting trial [1].

Statement from FIB

A spokesperson for FIB released a statement: “[FIB] is a paradigmatic example of a large-scale Ponzi scheme. In this Grenada case, investors were deceived by fabricated high returns created by money embezzled from original victims. Our advice to our members is to practice caution and thorough due diligence before participating in short-term, high-yield investment propositions. Be wary, as there is usually a hidden catch.” [1]

Lost Funds and Recovery

Regrettably, for those victimized by FIB, the chance of recovering any lost funds is minimal [3]. The court-ordered dissolution of the bank revealed that about one-third of the $170 million invested in FIB was returned to investors as bogus interest payments. Expenses were extravagantly squandered, while a significant portion was misappropriated when the defendants, in turn, were scammed by other fraudsters [3].

Extent of the Scheme

The elaborate scheme encompassed not only the First International Bank of Grenada but also Fidelity International Bank and thirteen subsidiary banks [1]. The court proceedings uncovered counterfeit financial instruments, allegedly originating from authentic financial institutions such as Bank of China, Union Bank of Switzerland, and Dai-Ichi Kangyo Bank, worth over US$10 billion [1].

References:

[1] Associated Press. (2003, January 14). Scheme’s net worth estimated at over $10 billion. Retrieved January 23, 2023, from AP News: https://www.apnews.com/article/business-financial-markets-law-and-government-west-virginia-pennsylvania-grenada-9ccf6c995cb84c2a7826c3d3017e1782

[2] U.S. District Court. (2003, March 19). Judgment and Order of Restitution. Retrieved January 23, 2023, from U.S. Courts: https://www.wvnorth.uscourts.gov/sites/default/files/11-cv-0302.W.RE127921%20ORDER.pdf

[3] Associated Press. (2003, February 18). Chance of recovering $170 million is slim. Retrieved January 23, 2023, from AP News: https://www.wvgazettemail.com/news/52283/chance-of-recovering--170-million--is-slim/article_b5f4c358-f6b9-11d3-8c36-001cc4c032ca.html