Olint Ponzi’s Boss David Smith gets 30 years

David Smith of OLINT fame today was sentenced to 30 years in prison. He was sentenced after being found guilty on 23 counts of wire fraud, conspiracy to commit money laundering and money laundering. David Smith was previously sentenced to six and half years in the Turks on Caicos in 2010. David Smith ran OLINT as a foreign exchange (FX) outfit that promised persons high returns that averaged 10% per month.   In reality OLINT  was a massive Ponzi that managed to rake in reportedly over US$220 million from over 6000 investors.

History

OLINT started sometime in 2004 as a quiet members club whose growth depended on word of mouth referrals. By 2006 however the Unregulated Financial Organisation as it was called began to face scrutiny in Jamaica from the Financial Services Commission (FSC), the financial services regulators in Jamaica.  Despite many public warnings by the FSC and leading bankers at the time money continued to flow into OLINT via intermediaries that would become know as feeder clubs and ‘pigs’.

In 2006, after a raid on OLINT and LewFam Investment, they shared adjoining office areas, by the FSC, the club then moved to Turks and Caicos where it operated. David Smith was also connected to TCI FX, a registered company in Turks and Caicos.  OLINT  was registered at different times in Panama and St. Kitts.   David Smith also formed a partnership with the principals of I-Trade  FX (now defunct), a foreign exchange platform owned by the operators of the Market Traders Institute(MTI). In late 2007 the formed a partnership called GotradeJamaica.com and also launched the OLINT foundation.

It has been reported that David Smith was hailed by the FX Chief as one of the greatest foreign exchange traders something that would later turn out to be false.  The National Futures Association investigation in 2009 of  I-Trade FX would show that David Smith/OLINT did little to no FX trading and when they did they lost. The same was fate of Ingrid Loiten of May Daisy apparent attempts at FX trading.

Influence

OLINT was acknowledged to have supported both political parties in Jamaica but the Jamaica Labour Party(JLP) is reported to have garnered significantly more support than the Peoples National Party(PNP). In fact some have argued that OLINT funds had a bearing on the outcome of the Jamaica elections in 2007.  Information available indicate that politicians from both sides of the divide in Jamaica, leading money market experts in Jamaica, doctors  lawyers and the likes are those that invested in OLINT.  One politician, Errol Ennis, a former minister of state in the Finance ministry, described the raid, on OLINT at the time, as a vulgar abuse of power by the state. Audley Shaw the current Finance minister was reported to have said in the Gleaner of January 31, 2007,  that FSC’s  actions against Olint, an entity which offers attractive interest rates, were unacceptable.

OLINT also sponsored the 2008 Jazz and Blue Festival, an annual music festival held in Montego Bay, Jamaica or its environs.

Former heads of the FSC, Byran Wynter, now the present governor of the Bank of Jamaica and George Roper the acting head 2007-2008, took much heat from the public for their strident opposition to the unregistered and unregulated financial operators  or alternative investment schemes as OLINT and others like Cash Plus, May Daisy and Worldwise etc became known as.

Impact on the Diaspora

OLINT word of month referral led to the investments coming from Jamaicans living in the USA, Canada, UK among other countries. The impact of the OLINT crash was particularly felt in Florida often referred to as Kingston 21.

In 2008, after the Ponzi ran into difficulties paying its customers and Money Laundering and other charges surfaced in July 2008, David Smith was arrested in Turks and Caicos  and the famous confession letter surfaced. He was later charged and convicted and subsequently brought for trial in the USA in 2010.

According to the Orlando Sentinel, Smith is to serve his sentence in the Turks and Caicos then the rest of time in the United States.

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David Smith to be sentenced Thursday, Aug 11, 2011

If  prosecutors have their way David Smith the man who ran one of the largest Ponzi scheme in Jamaica and the Caribbean could spend the rest of his life in prison.

The fall of David Smith’s empire is nothing short of incredible,as at one point in time, if you did not have money in Olint you must have been an idiot. The “club” as it was called was exclusive and if you could not get in you just turned to a “pig” ie you latched unto someone who was already in the club.

The client that he had was some the who’s who in Jamaica and was said to have included some well heeled individual as well as some financial analyst. As Smith await his faith on Thursday, I am amazed at how he appears to have decided to take the full fall and not name his co-conspirators, some of  whom  made a lot more than he did in the fraudulent scheme.

That is so not “cool”. David is like a man in the middle of the desert on a fertile piece of land.

If you get my drift.

 

Update.

Heard the Feds were in the tourist resort last week “cooling”  or was it “staking out”, not sure we will just have to wait until we hear from the District Attorney.