Legal
Cayman Bank, BVI Forex Trader Sued In Alleged Ponzi Scheme
The victims are reportedly seeking the location and repayment of tens of millions of dollars that they believed was going to be invested in foreign currency trades.
More than 200 people are suing Cayman Islands-based DMS Bank & Trust and Capital World Market (CWM), a foreign exchange trading firm in the British Virgin Islands, over an alleged £50 million ($65.9 million) investment fraud.
Cayman Compass cited a writ of summons filed 11 July with the Grand Court. It alleged the money investors thought would be allocated to foreign currency trades was used instead to pay off previous investors with CWM and its associated companies, and to pay for company expenses and sponsorship agreements, or to “pay for the lifestyle” enjoyed by CWM’s chief executive, Anthony Constantinou, and others.
CWM's London office was raided in March last year with 13 people arrested following a police investigation into alleged fraud.
The investors allege that “a significant portion” of the funds invested in the scheme, which is now under investigation by the City of London Police, were deposited into the accounts of DMS Bank & Trust, a Cayman Islands Class B [not locally operating] bank, Cayman Compass reported. Most of that money cannot be accounted for, the lawsuit claims.
“Of the circa £50 million received in the DMS Bank & Trust accounts from investors, only about £1.2 million remains in the CWM BVI account and approximately £100,000 in the Treasure Trove account [Treasure Trove was one of the companies Mr. Constantinou owned, court records state],” according to the writ.
This publication has contacted DMS for comment.
Last year, DMS sued Jazeb Jones, former managing director of its bank, for entering into an “inappropriate” business relationship with two clients and receiving “excessive gifts” in exchange. The CWM investors’ July lawsuit surmises that the two clients were either CWM and Constantinou, or CWM and Treasure Trove, a company owned by Constantinou.
“Having decided, rightly, that DMS Bank & Trust should not engage in further business with CWM and having instructed the closing of the DMS Bank & Trust accounts, they failed to ensure that the same were closed,” the lawsuit states. “DMS Bank & Trust is liable to pay damages to the plaintiffs.”
