It couldn't have happened to a more deserving group.
Earlier this week, a U.S. District Court in Oregon sentenced four officers of the now-defunct First International Bank of Grenada to prison terms up to eight years.
While it was in business from 1997-2000, FIBG promised "guaranteed" annual returns up to 300% for funds invested with it. To assure depositors that their investments were safe, FIBG claimed that an independent deposit insurance company insured them fully. However, when FIBG went belly-up in 2001, the company supposedly insuring these deposits never made good on them. Depositors lost nearly US$500 million in all.
The FIBG scam began when one Gilbert Allen Ziegler came to Grenada from Oregon, after declaring bankruptcy in 1994. With no banking experience, no identifiable assets, and a passport issued by a non-existent country (the so-called "Dominion of Melchizedek"), Ziegler obtained a banking license in Grenada with the aid of corrupt local officials.
Grenadian banking regulators permitted Ziegler to capitalize the bank on the strength of a jeweler's supposed US$17 million appraisal of a single ruby. Ziegler possessed only a photograph of the ruby and wasn't able to prove that he owned it.
Radical New Approach to Asset Protection & Privacy
In 2006, more than nine million Americans had their identity stolen and approximately 1.8 million were sued. And laws like the USA PATRIOT Act greatly expand warrantless searches and permit government property seizures without proof of wrongdoing.
Big Business and Big Brother want to keep you and your wealth in plain sight, to be profitably tracked and conveniently seized. However, you can still legally create international 'lifeboats' of wealth and privacy that are practically invulnerable to snooping or confiscation.
Unfortunately, Ziegler wasn't around to receive his just desserts in the Oregon courtroom earlier this week. He died in 2005 of a heart attack. But four of his associates will now be serving time after their convictions on multiple counts of mail fraud, wire fraud, conspiracy, and money laundering.
The lesson of FIBG is simple: if something sounds too good to be true, it probably isn't true. Unfortunately, this lesson has yet to be learned by many investors.
No matter where you invest or do business, onshore or offshore, appearances can be deceiving. There is no substitute for due diligence. And while in FIBG's case due diligence was difficult because of the connivance of corrupt government officials with Ziegler and his co-conspirators, anyone promising of a 300% "guaranteed" return can't be taken seriously.
Further, even a cursory review of Ziegler's background would have demonstrated that he had zero experience in the banking industry. How realistic to expect that someone with no background in banking could somehow stumble upon a miraculous investment that provides a 300% guaranteed annual return?
When investing offshore, the first rule is "hang on to your wallet." Because there are many offshore scam artists ready, willing, and able to separate you from your hard-earned money.
Copyright © 2007 by Mark Nestmann
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