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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How did Olint steal your money, and how David Smith planned to get away with it.

From all the information that has been made available, it appears that David Smith really did little or no forex trading in the years prior to 2006 and then in 2007 attempted to create the illusion that he was really a big time trader.

I am of the view that and the end of 2006 and into 2007, the cash laying around in Olint had started to deplete as some persons opted to get out after the fight with the FSC.

Having recognized that he would more than likely soon ran out of money DS decided to make some changes that would allow him to steal as much as possible as he  in was in fact being robbed by his “partners”.

David Smith gathers his lawyers and began the process of separating his client’s money from them, and actually making the clients facilitate this process unknowingly.

Olint created a what was later  called a “private club members agreement” which was a new membership document which each client was told to sign and return or risked being kicked out of the club.

This new document( as far as I am aware) had no protection which had be offered in the earlier membership agreement, as while in the former it was stated that 80% of your funds where secured, this new agreement had no such thing. (We will get back to this later).

In early 2006, David Smith partnered with the Martinez to form I- Trade FX, as this was now going to be the vehicle used to steal as much money as was possible from his remaining client. (He was added as co-owner in Sept 2006)

David Smith subsequently started wiring funds to “fund” this account and appeared to have been doing some trading, in order to give his clients the appearance that he was really a super forex trader.

The trades that were being done were not particularly successful, but this was only a part of the larger plan, as now he could tell is loyal clients that he had lost most of the money while trading, which in this field was not illegal. You see the new agreement that his clients signed, gave DS full control over the pool of funds available and there was no protection being offered to his clients (i.e. no 80% was sitting around safely in the bank.)

While David Smith was trading and racking up losses (deliberately so), he was being assisted by other in moving the funds that he had been transferring into his personal accounts all over the world.

The losses that were been incurred on his trading platform were actually payments being made to his partner i.e. the co-owner of I trade FX (Really clever don’t you think). The trading records would show actual losses, (as he really did not want the fraudulent activity to be as brazen as he writing a check to these guys), so how better to get it done, while making it  appear to be a legitimate business(trading) activity.

The creation of TCIFX hedge fund was really smoke screen activity, once again to give the appearance that genuine trading activities were taken place, and where only done to increase cash flow to Olint thus allowing the process to continue for a while longer,which facilitated the concealment of stolen funds.

David Smith is very well aware how law  enforcement officials works in the Caribbean and so with very limited resources on their hands, they cannot afford the time or money to track the loot that may have been spread to all corners of the world.

Notes:

The account of activities mentioned above have not been verified by law enforcement, and is based on available records from the NFA, the FSC and personal views.

Lewfam Closing ?

We have in our possession a copy of an email which was just sent out to Lewfam clients last night (Dec 3, 2007).

Is this the end of the road for Lewfam or will the office reopen as stated in the email.

 

Dear Member,
As at midnight 3rd December 2008 the LewFam Investment Club website will be suspended until further notice. Our office remains open to continue answering your calls and providing you with any available updates. Please feel free to call us. Our regular numbers will be available along with three additional numbers: 305-600-4367; 954-376-3277; and 404-567-4804.
We will be closed for the Christmas Holidays as at December 12 and will re-open on January 12, 2009
Thank you very much for your continued support and patience during this continued trying time.
Please have a happy and fulfilled holiday.
Management and staff
LewFam Investment Club

Lewfam: We are still waiting

Lewfam Club has issued another updated to members. In an apparent attempt to keep its promise to members Lewfam issued an update this morning. The short message is shown below.

Dear Members:

We have not yet received the information we were anticipating yesterday, but as soon as it is available we will let you know.

We apologise for the inconvenience but continue to appreciate your patience, understanding and support.

Management and staff of LewFam Club

Last week August 8,2008, Lewfam issued an e-mail advisory informing members that .  The apparent inability of Major Lewis to get any useful answers out of OLINT is another clear sign suggesting dark days ahead for OLINT investors.

Lewfam’s relationship with OLINT goes back to pre March 2006.  In fact, in March 2006, LewFam Investments and Trading Limited/Neil Lewis, et al,LewFam Investments Club/Neil Lewis, et along with OLINT Corp. Limited (“OLINT”)/David Smith, et al,Overseas Locket International Corp./David Smith, et al, were issued a Cease and Desist order by FSC in Jamaica.

Related:

 

Lewfam publishes new update

Lewfam has posted another update to its troubled members. The update reads as follows

Dear Members,

We wish to take this opportunity to thank you so very much for your continued patience, understanding and support shown in so many different ways.

Please be assured we are working assiduously to procure funds to honour urgent encashment requests of our LewFam Club members. At this time we are unable to give you a specific date when those funds will be received by us for disbursement, but we are working very diligently to fulfill your requests.

We have not received any gains reports from the trader for the month of July, but we are awaiting further communication from him. We will therefore be communicating with you again on or about the 12th of August when we expect to have some more news.

Again, we thank you for your continued support.

Management and Staff

LewFam Club

n.b. Thanks to the poster who posted this. Keep posting or e-mail information to hyipmyths [at] yahoo [dot] com.

Lewfam updates members

It is all unraveling and it is becoming sadder with each passing day. Lewfam has issued an update to their customer. The full contents of the letter can be seen below.

Dear Members;

We apologize for the long wait in communicating with our members. We have been trying to fully understand the situation surrounding all the negative publicity directed at OLINT and our trader, Mr. David Smith before contacting you.

This statement is therefore the latest update, as we know it. Mr. David Smith, had been enduring due diligence on his fund which we were assured would end on July 2 resulting in the release of funds to its members including LewFam. We wish to state that no funds have been delivered into our hands hence no fulfillment of current encashment requests to our members.

On July 14 the offices of OLINT Jamaica were closed. The reason stated by OLINT was because of threats including bomb threats. On the same day we were informed that Mr. Smith was under investigation and his accounts and assets in the Turks and Caicos Islands, where he resides, have been frozen. Mr. Smith has not been arrested and he is free to travel and continue conducting his business. There has not been any gains reported for June and this is understandable.

Mr. Smith has indicated that there are large numbers of members requesting withdrawal of their funds. He has further stated that in order to fulfill their requests, an audit will have to be completed. His auditors will ensure the equitable disbursement of these funds. We await word from OLINT as to when disbursements will resume and we enlist your prayers, patience and restraint. Be assured that LewFam will be acting on behalf of our members to ensure that their interests are protected.

We remain steadfast with Mr. Smith in prayer and in our private and public support for him as long as it takes to resolve the current and future situations.

We recognize that members are experiencing severe hardship at this moment, but we ask again for your continued prayers, patience and restraint.

If you have any questions, please do not hesitate to contact us at 866-274-3272.

Management and Staff
LewFam Club

Related

Payment Delays and Problems abound

Despite the annoucements of schedules,cycles and policy, the reality is that payment problems persists

  • May Daisy: There has been delays, stories of changing management and questions of who is in charge.
  • Olint: There have been delays already people are becoming edgy. The second batch of payments should have be completed on June 26, 2008.
  • TCI FX: 0% return for May as allegedly no trading took place but people appear to have been paid.

Affiliate Clubs feeling the pinch

Also of concern is that rumours are surfacing that many affiliate/feeder clubs are having problems paying as they have not gotten paid by the source, allegedly Olint.

  • Lewfam: Some members claim no payments since March,others got paid in May although some not the full amount requested. They also seem to have investments in other suspect schemes.
  • UWIN ANtigua: Has told some persons that  there will be no payments until September 2008. If you look at the OLINT’s new encashment Policy you might see a relationship.
  • Wealth Builders: They have been having problems with accounts where the investments is with OLINT . In this Observer report of  March 3, 2008, Olint run delays payments, members have been warned of delays

Returns falling?

Another interesting thing that is happening is that nearly all the that have not been paying have reported lower than usual returns for May. Returns have fell to the 4-5% range, far below members’  expectations. Whether the returns are real and existed in the first place remain the question as there simple no way to independently verify this. The returns for June will be of interest.

Deposited money not being acknowledged

Another worrying development is that a number of person who have allegedly wire money to one club in particular are not seeing those moneys credited to their accounts although their bank accounts have been negatively affected. In some cases the money is credited weeks or months later.

Documents Disappearing.

Another interesting thing that is happening is that documents are disappearing. The TCI FX website is no more, after briefly pointing to the Lewfam website. Whether this was an accident or not, it occurred. Documents no longer available via the web include

  • TCI prospectus has disappeared with their website ( we have a copy)
  • Willshaw’s Prospectus has also disappeared. (we have a copy)
Other Factors
In addition, the climate for unregistered financial organisations(UFOs) is tense and rightly so. The number of scams being uncovered across the world have made “investors” edgy.  The change in one club’s policy means a reduction in the number of accounts one person can hold. There also allegedly no need the middle man anymore which is putting the present middle men under great strain as they are now caught in the middle. Interesting times are ahead and we will keep watching.
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