The massive First Bank fraud that took place under the watch of Grenada’s ruling New National Party (NNP) government of Prime Minister Dr. Keith Mitchell occupied centre stage at the recent sentencing of four offshore bankers in the United States.
Defendants Rita Regale, Douglas Ferguson, Robert Skirving and Larent Barnabe were key figures of First International Bank of Grenada (FIBG) which bankrolled the NNP to its historic 15-0 clan sweeps of the polls in the 1999 general election.
During the criminal trial of the four Americans, former Chief Regulator of Offshore Banking in Grenada, Michael Creft testified on oath that he collected $100, 000.00 from the bank to give to officials of the ruling party.
According to Creft, he handed out $50, 000.00 in cash to Prime Minister Mitchell and $25, 000.00 to Tony Joseph, the then Treasurer of the NNP and used the other $25, 000.00 to pay off expenses for the election.
Below are extracts from the Sentencing Memorandum from the U.S Court in Oregon on defendant Douglas Ferguson, one of the masterminds of the First Bank scheme that took place under the NNP watch:
DOUGLAS C. FERGUSON
Defendant Douglas C. Ferguson was a long-time associate of Van Brink, collaborated with him on a variety of questionable projects, and was instrumental in the opening stages of the fraud scheme.
Prior to his involvement with Brink, Ferguson sold insurance and managed some dry-cleaning shops in Oregon.
• In approximately 1994, while in Hawaii, Brink and Ferguson established Wheatland Interests, an entity that created pure trust organisations (PTOs) to assist individuals in hiding their income and assets from the IRS.
Brink and Ferguson enlisted Ferguson’s son-in-law to register these PTOs with the State of Oregon, and to open up bank accounts for the trusts at Safeway Northwest Credit Union.
Brink and Ferguson gave presentations to prospective clients about financial matters and the establishment of PTOs at Brink’s Maui home and at area businesses. It was at this type of meeting that defendants Rita L. Regale and Robert J. Skirving met Brink and Ferguson.
• In July 1996, Brink convinced Diana Radford, his colonic therapist, to take out a home equity loan and invest in his offshore Bank, promising that her investment would be 100% guaranteed by the IDIC and that she would earn 50% interest on her investment.
At the time, Brink had not yet purchased the license for FIB, and IDIC did not exist. Radford’s loan application was denied. In October 1996, Brink created a fraudulent loan application and fabricated a letter from an attorney to obtain a $750,000 home equity loan for Radford. Douglas Ferguson was the registered agent listed on the fraudulent corporate records submitted with the loan package.
Brink promised that $300,000 of the proceeds from Radford’s home equity loan would be used to invest in FIB certificates of deposit. It was right around this time that Brink actually purchased the FIB license from a long-time tax protester named Jerome Schneider.
While Brink made good on his promise to Diana Radford to pay 50% interest on her investment, he neglected to tell her that he made the first few interest payments with her own money.
• Once FIB was established, investors were instructed to send their funds to an address in Antigua. However, this was just a mail drop, and as soon as investment cheques arrived there, they were placed in an envelope and shipped back to a bill-paying business in Forest Grove, Oregon, called Automated Payment Processing (APP). Douglas Ferguson, acting as President of FIB, signed the contract between FIB and APP.
• Initial deposits to FIB were passed through APP to two bank accounts at Safeway Northwest Credit Union controlled by Brink, Ferguson, and Brink’s girlfriend.
From those accounts, the three paid all their personal living expenses and lulling payments to the first FIB investors. Ferguson used $100,000 of investor funds to open a brokerage account at Paine Webber that he and Brink controlled.
Brink and Ferguson deposited profits from this brokerage account into their accounts at Safeway Northwest Credit Union. Ferguson became its Executive Director. Ferguson drafted the language to be placed on FIB certificates of deposit assuring depositors of the IDIC’s 100% guarantee against loss.
