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.

OLINT’s David Smith Arrested again

Investforlife can now confirm that David Smith of OLINT, OLINT TCI and TCI FX among others, has been arrested again. A source in the Turks and Caicos and more importantly the  Financial Crimes Unit has also confirmed the arrest.

We now understand that there are additional charges as outlined below.

  • 1 count of Theft
  • 1 count of Obtaining property by  deception
  • 2 counts of Money Laundering

He was granted by in the sum of US$ 2 million.

Last week, an Liquidator to wind up  OLINT TCI was appointed.  An article appearing in the Jamaica Observer today indicated that David Smith apparent fears returning to Jamaica but it seems he is facing more legal troubles in the Turks and Caicos.

OLINT and its related companies has failed to pay investors since at least January 2008.  Many feeder clubs associated with OLINT have not paid either.

Source:

David Smith may seek exile, fears for his safety

Lead principal of Olint David Smith who is under house arrest in the Turks & Caicos fears that if he were to return to Jamaica that the safety of both himself and his family would be placed in jeopardy and he has not dismissed the prospect of being a permanent exile.

http://www.jamaicaobserver.com/magazines/Business/html/20090612T040000-0500_153317_OBS_DAVID_SMITH_FEARS_FOR_HIS_SAFETY_IN_JAMAICA.asp

FlashBack: Lawsuits, Injunctions and Forex to Ponzi?

Today we start a series we call Flashback: ‘Last Year this time’. We will run this weekly series until the end of August.

Week ending May 30, 2008.

The week started with us looking at the Cash Plus boss facing the probability of going back to jail after being released on bail, if he failed to declare his assets. By this time, lawsuits against Cash Plus were also propping up. Questions whether they were worth it also surfaced given that effectively the lawsuits would be against the courts since Cash Plus was under the control of a court appointed receiver. Seeking to have the UFO liquidated and charges filed for fraud seems the best option.

Interestingly, one of those lawsuits was being served on behalf of David P. Rowe, a man who had publicly defended Cash Plus and chiding those who sought to clamp down on the Ponzi

OLINT new members agreement
On the Olint front, investors were being told they had to sign a new agreement by May 31, 2008. The agreement was suppose to pave the way for payments to begin in late June 2008.

The link between Lewfam,TCI FX showed it face on the Internet as a visit to TCIFX.com carried you to the Lewfamclub.com website. That slip was correct soon.

We highlighted a story with frigtening similarities to OLINT. A Forex club run by John Ward that allegedly started as a FOREX club but turned out to be nothing more that a PONZI.

Our highlighting of the following statement from a prospectus also created a stir.

TCI FX
The Fund TCI FX TRADERS LTD (“the Fund” or “the Company”) is an open ended investment company incorporated in the Turks and Caicos Islands on August 16th 2006 and subject to the laws of the TCI. It is established for the purpose of investing through OLINT TCI which is a FX Trading entity, with the object of obtaining constant above average absolute return through a disciplined investment approach.

Somehow the reported rates for the clubs (Olint TCI and TCI FX) were interestingly different. This revelation to some cause a stir.

Acount Closure Battles
Another UFO, Worldwise was also in the news battling RBTT’s decision to close their accounts. while Olint was also waiting on the court to hand down a decision in its case against NCB also related to the closing of accounts.

OLINT to be wound up

The  TCI Weekly News is reporting that OLINT TCI is to be wound up beginning Tuesday June 2, 2009.

David Smith home and offices were raid in July 2008 and assets frozen by the TCI Law enforcement.  Later that month, OLINT and David Smith’s accounts in the USA were frozen. In February  2009 he was charged by the TCI authorities for fraud and other theft related offences

The TCI weekly quotes, Justice Richard Williams as revealing that the Supreme Court in TCI had personally received “streams of correspondence” from anxious local investors.

“I feel terrible for them, it’s sad for all the people.” – Justice Richard Williams

The question then, is there enough money. According to the TCI weekly, Justice Williams is reported as saying the following:

“The amounts that the AG disclosed to me, there are not the amounts in that account to meet the amounts the creditors say they are owed.” … 

Appointment of Liquidator opposed

However, it is understood that OLINT through its directors David and Tracy Smith are apposing the appointment of a liquidator. In the Cash Plus case Carlos Hill seem originally alright with the receiver but later fought to have the receiver removed. Subsequently a liquidator was appointed in the Cash Plus case. It should be noted There is already a wind-up order in place for TCI FX trader, a TCI based company.

In general, since January 2008, investors in OLINT has not been paid interest and have been unable to have their principal repaid.

There are currently a number of lawsuits against OLINT in the TCI and in the USA. It is interesting what will become of those lawsuits now that the liquidator has been appointed, given the lessons learnt from Cash Plus and other failed PONZIs.

Source: 

Related:

Investforlife & HYIP Programs one year later

May 2009 marks  roughly one year since this blog started, and it is interesting the turn of events.  It has been a most interesting year as the details of the Alternative Investment Schemes(AIS)/Un-regulated Financial ORganisations(UFO)  came out. It was however sad to see and hear the stories of persons deceived and deluded, some even to this day.

While there were others, the following persons, Jason, Nocotec, Jay, Robin Irie,  JohnDoe, DaveSin  were particular targets of harsh criticism for the daring to call the HYIPs Scams. So reviled was this group that were driven from a site (blog) that will remain nameless but it is now known as the #4 bus.  Interestingly, it was the suggestions of some of the posters on that blog that resulted in the formation of this blog. 

Their suggestion was taken and investforlife.wordpress.com was born. One year later, having been featured on NationWide, CVM TV, mentioned indirectly by Observer writers, and over 950,000 page views, Investforlife remains while may UFOs have died along with many supporting websites.

Here is the list of the some ‘programs’ or ‘clubs’ and their prognosis.

  1. Cash Plus – Dead. CEO arrested and charged.
  2. WorldWise  – Dead.
  3. May Daisy – Dead. Anyone knows where the CEO is?
  4. Olint – Dead. CEO arrested and charged.
  5. Capital Blu – Dead  CEO arrested and charged.
  6. TCI FX – Dead.
  7. CARIEF – Bedridden.
  8. Higgins Warner – Dead.

Feeder Clubs – Dead

  1. Lewfam (Jamaica) – Dead
  2. SGL Holdings(Grenada) – Dead 
  3. KUI(Jamaica) – Dead
  4. Wealthbuilders(Jamaica) – Dead
  5. UWIN(Antigua) – Dead
  6. Vision Increase(Panama) – Dead
  7. Regency International(Florida) – Dead. CEO arrested
  8. F1 Investments(Florida) – Dead. Filed lawsuit against May Daisy
  9. Willshaw(St. Lucia) – Dead
  10. RKR Funds – Dead.

Some sites where the predominate theme appeared  to be the defense of the UFOs have also died or changed focus. We congratulate those that allowed the contrary fews to posted.

  1. jamaicainvestmentwatch.com (dead)
  2. cashplusinvestment.com (refocussed)
  3. http://www.highyieldsource.com/forum (in need of cleaning up, controlled by spammers)
  4. wealthmax.wordpress.com – remains for the record.

Thanks to all the contributors that have kept this blog going, despite the challenges. May this experience be a lesson to us. Think and check before you invest.

OLINT ‘Water’ Boy? No Way!

Mark Wignall has come out kicking against some revelations that if  they are true could raise serious questions. Having read the article he gives no indication that any of those e-mails we have seen have been false.

Instead much time has been spent giving a history lesson of when he started writing, his growth as a writer and involvement in the  OLINT affair.

Where is the proof?

The following quotes are of interest.

“What eventually sold me on OLINT was its ability to sustain the 2006 raid, sustain a 70 per cent withdrawal of funds and still survive.”

This has long been used as a selling point that OLINT was no scam – the ‘survival’ of Olint when the FSC came raiding. This is the problem when you have no transparency. This is not the case of the SEC falling down on their job like Madoff and now Stanford. The FSC wanted information and OLINT refused. Yet, people believed OLINT’s claim about this 70% without one shred of evidence to back it. Where did that figure of 70% come from?  Could it be independently verified? 70% of what, persons or funds?.

“A pyramid-like structure could never sustain such an incursion.”

Here is the problem with that statement.  One assumption being made on the premise that the first assumption  is true. The validity of the first assumption, i.e. the 70%, is not known, therefore the building on it  to declare a truth is not the way to go. Also a Pyramid scheme is defined slightly different from a PONZI.

In the February 2007 article, that appears to be part of the questioning the following quote is found:

“I have been informed that Olint will not be taking in any new customers until a time to be announced, probably in March(2007). The question I would like to ask Rutte Ginpebn is this: If Olint was a PONZI scheme, would it not have failed long ago, with no new funds coming in from the base to feed the top?”

Again, an assumption was made that a) a PONZI can’t last a long time b) no money was coming in. Firstly there are the Madoff and Lou Pearlman examples of PONZI’s that lasted a long time. Secondly, what should also be clear to everyone now is that OLINT survived by taking money through the back door, piggy backers and feeder clubs, and by moving offshore to the TCI and accepting wires there.

I still can’t believe that people ‘in the know’ did not know that Olint had a) so many feeder clubs, (many seen as liars now) and b) that the persons who were old customers could continue to add new money therefore become ‘piggy backers’.

His Defence

Mark Wignall acknowledges;

“It is quite true that one of my main sources was the PR arm of Olint I need to pose these questions”.  (bold added)

Those questions are listed below.

  1. “How many times have journalists, columnists sat down with various PR bodies to pose questions to them”?
  2. “Second, if my general views on the subject, the person or the entity are well known to those bodies, how can it be a secret as to where I may be going with a column next week”?

(see article The OlINT Saga: I was not David Smith’s Boy!)

Good questions, and reasonable answers. However the answer to the second question serves the interest of those looking for an ally, who knows a pawn, in the media. Control the PR getting to that influential journalist, given their known sympathies, and you will be  be sure the support from the masses will grow.

Troubling

There is one e-mail that I found troubling. A certain banker  appears to send an e-mail to Mark Wignall with comments about ‘Literary Genius’ with references to another outspoken anti-UFO banker. That banker it is rumored, had jumbled his name to come up with a pseudonym used in a letter sent to the Observer. What does Mark Wignall do,  he appears to forward the ‘Literary Genius’ e-mail to ‘PR arm of Olint’.

The issue of seemingly sending an article to the group of persons now known as the ‘PR arm of Olint’  raises certain journalistic ethics and integrity questions. Should the subject of every article  therefore be given the right to review the article before publication?  From my research and common sense, such a practice should simply be avoided as it puts the journalist under undue pressure as the subject/representative might want the information toned up or down to suit their purposes.

My Question to Wignall are:

  1. Did he send and receive those emails, including forwarding the one from the Managing Director of a leading bank in Jamaica?
  2. Given what has come to light, does he still believe that OLINT, is not questionable operation much like Cash Plus?

I will add in his defence, sometimes you get used and you don’t even know you have been used. When King David got Joab, his army chief, to send Uriah to heat of the battle, Uriah had no clue that he was been set up.

OLINT vs Cash Plus
The truth is Wignall was a writer whose articles I read regularly. But even before these e-mails came to light and the subsequent innuendoes, I was very disappointed with his handling of the OLINT affair from early 2007. I was very displeased when he attempted to make a distinction between OLINT and Cash Plus, knowingly or unknowingly, effectively ‘unofficially’ declaring one legitimate and the other not.

Indeed ‘Water Boy’ or not, I thought it an irresponsible peice of Journalism. THis is the problem people with influence face. You have to be careful not just with what you endorse, but what you appear to endorse.

So far the main distinction is that one claimed to be dealing in Forex Trading and the other was claim to be conglomerate of companies in everything from real estate, cambio services, telcommuncations, hospitality and more.

THen, neither was  licensed by the FSC, both beleived that the FSC had no right to regulate them, but offered no transparency and no accountability. Then both offered fascinating rate of returns 10% per month in one case and in the other returns that averaged about 10% per month.

Today, they are still not registered or regulated by the FSC in Jamaica.  One is a declared Ponzi and in the hand of a receiver/liquidator and the other probably a ponzi too , and both have had their principals charged for fraud. Today, investors of both clubs are still left holding the empty bag.

BTW: If there are any  laws that this blog is flouting, please let us know by emailing us at hyipmyths [at] yahoo.com. Also the title is not a direct quote but an interpretation.

Reference:

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