Canadian financial advisers hijacked retired investors’ money in Cayman Islands trading scam
MIAMI, USA -- An unfolding Cayman Islands financial scandal reportedly involved the illegal diversion of funds of as many as 70 retired and handicapped Canadian senior citizens, for the purpose of using client money to conduct unauthorized trades and keep the profits. The entire scheme is said to have been orchestrated and run by a major Canadian investment firm, located in Ontario.
The diversion of client money by Fernando Moto Mendes, Sharon Lexa Lamb, Ryan Bateman, and Derek Buntain was accomplished under the supervision of the Canadian investment advisers entrusted with safeguarding their clients' life savings. Some estimates of the total amount of client funds missing exceed US$400 million. A portion was apparently transferred to unlicensed Cayman Islands investment firm Bateman Capital; other funds were diverted elsewhere.
Investigators have now confirmed that the offshore financial institution where the Canadian advisers, and their Caribbean conspirators, have long stated that client funds were on deposit, have no records that the clients ever had any funds in that bank, notwithstanding that verbal and written assurances were given to the clients. Numerous complaints from Canadian investors, who are unable to access their funds, have been received by regulators in the Caribbean jurisdiction where a large portion of the money disappeared.
Some of the staff and officers at the Canadian investment firm in question were formerly employed at a prominent financial services company, and were reportedly asked to leave after being implicated in a stock manipulation scheme. The matter was investigated by the Ontario Securities Commission, but the company declined to press criminal charges.
That appears to have been a mistake, for some of the departing employees improperly used confidential inside information concerning the company's future acquisition. One individual is retired, but all the others are active investment advisers.
The Canadian company is refusing to release any financial information to those clients who believe that they have been defrauded, their assets dissipated, and illegal covert profits taken with their money. It has, however, disclosed that it has engaged in what may be considered as illegal trades in securities, using their funds, without client permission, authorization and knowledge. Documents were allegedly altered, client signatures forged, and records destroyed, all to cover up the trading fraud.
It is believed that the company's present dilatory tactics are being conducted solely to allow it sufficient time to sell off assets, to find money with which to repay its investors, as client funds were reportedly completely co-mingled with other capital.
The civil, and criminal, liability of the company, and its officers, directors, staff members and employees will certainly be a question for Canadian courts, and courts in other jurisdictions, as more details of the scandal emerge.
By Kenneth Rijock
Photo: Ryan Bateman, former principal of Bateman Capital, now a fugitive from justice
Kenneth Rijock is a banking lawyer turned-career money launderer (10 years), turned-compliance officer specialising in enhanced due diligence, and a financial crime consultant who publishes a Financial Crime Blog. The Laundry Man, his autobiography, was published in the UK on 5 July 2012.