Hope for Olint investors

US Department of Justice announces e-mail address to register claims

BY DESMOND ALLEN Executive Editor - Operations allend@jamaicaobserver.com

Wednesday, March 30, 2011

THE United States Department of Justice yesterday sparked a glimmer of hope for thousands of Jamaicans who lost hundreds of millions of dollars to David Smith’s Olint, one of the biggest Ponzi schemes in recent memory.

“Any person who (is) believed to be a victim and wishes to submit a claim for restitution may contact the US Attorney’s office through a special e-mail account,” said Assistant United States Attorney Bruce S Ambrose in a release on the Federal Bureau of Investigations (FBI) website.

The e-mail address is ironically named david_Smith_ponzi@usdoj.gov after the author of the scheme who yesterday pleaded guilty to four counts of wire fraud, one count of conspiracy to commit money laundering, and 18 counts of money laundering, as part of a plea agreement in the Federal District Court of Orlando, Florida.

The Jamaican Government assisted with information in the case which was investigated by the US Immigration and Customs Enforcement, Homeland Security Investigations, Internal Revenue Service, and the FBI.

Thriving alternative investment schemes offering upwards of 10 per cent interest per month suddenly crashed in mid-2008, following local and international action that resulted in the freezing of investment funds estimated to run into the billions.

The biggest trader to be hit was Olint TCI operated by Smith. But the fall of that outfit dragged down many agents who had been collecting money from “members” and investing it with Olint.

Known widely in Jamaica as unregistered financial organisations (UFOs), the investment arrangement, eventually discovered to be a Ponzi scheme, duped even religious organisations, two of the most wellknown being LEWFAM and Faith International Investment.

“The US Attorney’s Office wishes to acknowledge that considerable investigative support has been and continues to be provided by foreign law enforcement agencies and governments, including the Financial Crimes Unit with the Royal Turks and Caicos Police Force, the Financial Services Commission in Jamaica, the Special Investigation and Prosecution Team in Turks and Caicos, and the governments of the United Kingdom, Turks and Caicos, and Jamaica,” the FBI said.

“Additional support has been provided by the United States’ Commodity Futures Commission and the National Futures Association,” the release added.

The release appears to be in keeping with earlier promises made by the US Government to protect Olint investors’ money.

In September last year, the Association of Concerned Olint Members (ACOM) in Jamaica said the US Government had assured the organisation that their investments would be returned to them, if Smith was convicted.

“Mr Ambrose has assured ACOM that it is only in cases where there are no victims that US agencies such as the DEA (Drug Enforcement Administration) and FBI, among others, are permitted by law to seize and keep the assets of convicted criminals. Mr Ambrose extended himself to assure ACOM that in the pending case against Mr Smith there are victims that all identified funds will go to if Mr Smith is convicted,” said ACOM spokesman Godfrey McAllister.

He said that Ambrose also gave the assurance that no discrimination would be meted out to Olint victims based on nationality or country of residence or if the victims had their own legal representation, if Smith is found guilty.

ACOM claimed it represented at least 1,000 investors in the failed investment club.

Yesterday, the FBI reported that Smith entered into a plea deal with United Sates Federal authorities which will see him being sentenced for 23 counts of wire fraud, conspiracy to commit money laundering and money laundering.

Under the plea bargain arrangement Smith’s wife will not be charged and escapes imprisonment.

He faces a maximum sentence of 20 years in prison for each count, although federal prosecutors are recommending to the court that his sentence be lightened.

In September last year, a Turks and Caicos court sentenced Smith to six-anda-half years in prison after he pleaded guilty to two counts of conspiracy to money laundering and two counts of conspiracy to defraud.

His wife, Tracy, was similarly spared by that jurisdiction and her right to travel was reinstated.

The Smiths moved to the Turks and Caicos after local police raided the offices of Olint and effectively shut down the Ponzi scheme which authorities say he used to bilk millions from 6,000 investors in Florida and the Caribbean.

He admitted in his plea agreement that Olint was a massive Ponzi scheme and that he paid returns to investors, not from profit but from their own money or that paid by newer investors.

Smith also admitted to transferring money to his own personal bank accounts and started living high on the hog.

He is said to have made large contributions to political parties, gambled heavily and made a down payment for the purchase of a Lear jet.

Olint was also a sponsor of the Jamaica Jazz and Blues Festival in 2008.

Smith is among 14 defendants in a lawsuit filed in the Circuit Court in Broward County, Florida by US businessman Don Dowe last year.

Despite mounting calls for him to be prosecuted in Jamaica, no charges have yet been laid against him by the local Fraud Squad.

Dowe claims that he has lost “approximately US$20 million” in the investment scheme and is seeking to recover the principal and profit of his account.

He is also seeking damages for what he said was a breach by Olint to honour his requests for the withdrawal of his funds.

Dowe reportedly took regular trips to Jamaica to invest in the now-failed investment scheme.