Financial Crime World

Four Executives of the First International Bank of Grenada Ordered to Pay Millions in Fines and Serve Jail Time for Defrauding Thousands of Investors of $170 Million

Overview

  • Four executives of the fictitious First International Bank of Grenada were found guilty of defrauding over $170 million from thousands of investors worldwide.
  • Three executives were sentenced to prison terms and ordered to pay restitution. The remaining executive, who died prior to sentencing, will not be able to pay the restitution owed to victims.

The Phony Bank and Its Executives

  • The bank, which collapsed in 2000, used counterfeit documents and promised spectacular returns of up to 300% to attract investors.
  • The group included a former mortgage banker, Gilbert Ziegler, who died in 2005 while awaiting trial.

The Scheme

  • The bank was exposed as a Ponzi scheme, where fake high returns were generated by using funds extorted from original investors.
  • Approximately one-third of the lost funds was paid back to investors as false interest payments, and significant portions were wasted on extravagant expenses or given to con artists.

The Impact

  • The fraudulent scheme involved not only the First International Bank of Grenada, but also Fidelity International Bank and thirteen subsidiary banks.
  • The total assets of the banks encompassed fraudulent financial instruments from well-known financial institutions like the Bank of China, Union Bank of Switzerland, and Dai-Ichi Kangyo Bank, amounting to more than $10 billion.

Consequences

  • Three executives were sentenced to prison terms and ordered to pay over $26 million in restitution.
  • One of the executives was living on social security, and another was employed at a grocery store while awaiting sentencing, making it unlikely that victims will recover their lost funds from the perpetrators.
  • The investigation took eight years, and the court hearing lasted three years.
  • Prosecutors emphasized the importance of caution and due diligence when assessing short-term, high-return investment opportunities.

Widespread Deception

  • This web of deceit left thousands of investors financially devastated, highlighting the need for heightened vigilance in the financial sector.