Banco Cruzeiro do Sul SA, Brazil

Financial Institution Management Fraud “The Federal Public Prosecutor's Office in São Paulo denounced on Monday, January 7, 2018, 17 members of a criminal organization that worked on several fronts for the practice of financial-administrative illicit crimes at Banco Cruzeiro do Sul SA…between January 2007 and March 2012.” Subsequently, the bank was liquidated and audits showed "impairment of the institution's economic and financial situation and serious violation of rules issued by the National Monetary Council and the Central Bank." Firm was retained by Counsel on behalf of a Brazilian client who sought confirmation of a tracing exercise to recover property valued... Read More...

The World Bank Group, Washington, DC

Financial Institution Bid-Rigging The Washington Post reported on July 16, 1998 the headlines “World Bank Hires Auditors to Probe Its Own Spending” “Possible Kickbacks, Embezzlement Cited”.  It states: “World Bank President James D. Wolfensohn acknowledged yesterday that within the past two months he has setup a special internal fraud team and hired the global accounting firm PricewaterhouseCoopers.” The Post reported on October 24, 1998 an article entitled ‘World Bank Probes Pakistan Project’ where it referred to PWC and its work on tracing ‘Elwan’s international holdings and vast financial records of the Pakistan projects.’ As the engagement partner, I led our... Read More...

The World Bank Group, Washington, DC

Financial Institution Bid-Rigging Tracing Loans Across Borders The Washington Post reported on July 16, 1998 the headlines “World Bank Hires Auditors to Probe Its Own Spending” “Possible Kickbacks, Embezzlement Cited”. It states: “World Bank President James D. Wolfensohn acknowledged yesterday that within the past two months he has setup a special internal fraud team and hired the global accounting firm PricewaterhouseCoopers”. As the engagement partner, I had the opportunity to work with counsel in conducting global investigations into allegations of corruption, conflicts of interest and fraud, regarding the Bank’s loan program and to advise on the Bank’s anti-corruption initiative. This... Read More...

Signet Bank, Richmond, VA

Financial Institution Loan Fraud Tracing the proceeds in the ‘Bank Caper of the Century’ “BANK CAPER OF THE CENTURY” is how Virginia Business magazine described the way former Signet Bank in Richmond, Va., was victimized by John Reiners, a former Philip Morris executive who obtained more than $300 million in bogus loans through Nelco, a local computer leasing company and a New York computer firm owned by Ruffo. Briefly, the two men invented a fictitious secret project for which the tobacco company supposedly needed millions of dollars worth of computers. Two Richmond banks and six other international lending institutions relied... Read More...

Dormant Bank Accounts of Victims of the Holocaust, Switzerland

Financial Institution - The Volcker Commission Asset Search A Search for the Assests for the Victims of the Holocaust Mr. Paul Volcker, Chairman of the Independent Committee of Eminent Persons issued a press release on November 19, 1996 announcing “…its Mandate and Instructions for the investigative audits of dormant accounts, financial instruments, and other assets deposited in Swiss banks by the victims of Nazi persecution”. Price Waterhouse was one of the three firms chosen and I was one of the three US partners selected to address the Mandate. I was also able to again work with a good friend, Hans... Read More...

Continental Bank – Creating Something From Nothing

Financial Institution Management Fraud Creating something from nothing Management created this company, Windsor Ceramic Tile with promises of employment in exchange for government loans. With these loans and their equity contribution in place, a fixed asset bank loan was obtained to finance the purchase of equipment intended to reduce the need for a large labor force, in order to make the company more competitive with its foreign competitors. Profits never came and the bank called the loan. With $50 million of fixed assets on the books, it became a challenge to find these assets in the manufacturing plant. In the... Read More...

Continental Bank – Grain Commodity as Collateral

Financial Institution Loan Fraud Grain Commodity as Collateral A bank was stung by the realization that the collateral placed by a commodity broker had little substance. After preliminary inquiries, it became evident that trading records in the possession of one of the brokers were essential to the matter. However, they were not forthcoming and thereafter an application was made for an Anton-Pillar order. I had been retained by Counsel and the idea of being a part of the invitation to search (via the Anton-Pillar order) was attractive, particularly given the level of case knowledge that I had already accumulated. But... Read More...

Greymac Mortgage, Seaway Mortgage And Crown Trust

Financial Institution Management Fraud $500 Million creates $230 Million Profit "Public Money and Private Greed: The Greymac, Seaway and Crown Trust Affair" (Terence Corcoran, Harper Collins, 1984) provided this opening description: “The true story of the rise and fall of three men-Leonard Rosenberg, William Player and Andrew Markle-who almost pulled off the greatest real estate deal in Canadian history: the $500 million sale of 10,931 Cadillac Fairview apartments to Arab investors that created an instant profit of $230 million….Two months after the sale their profits were gone and their business empires….had been taken over …by the Ontario government…” It came... Read More...

Regina vs. Waddilove & Steele

Financial Institution Loan Fraud An Acquittal of the Banker and the Bankee In May 1976, this fraud trial was held in Toronto, a trial that involved the largest allegation of bank fraud in Canadian history: $3 million. I spent 7 days in the witness box, in a jury trial using graphs and schedules to explain the circular flow of funds in a significant kiting scheme. Several interesting points arose from this case: The jury returned with an acquittal and a lesson was learned that there is no need to prove all the transactions in a case as it becomes too... Read More...

Regina vs. A. Pellizzari

Financial Institution Bribery One Bank Manager costs $10,000 This is a case of a bank manager eager to promote his loan program to meet his business objectives. There is nothing wrong with the objective but for the receipt of funds paid by the bank manager’s client to a company owned by the manager’s wife. Again, it is the human perspective, which requires study here, and that is why I include this case. The client’s loan amount was $1,647,000; the six payments to the bank manager’s wife’s company totaled $10,070.18. Clearly, the year, 1980, had not been good. Again and again,... Read More...

Regina vs. Grant Clark, and others

Financial Institution Loan Fraud $16 Million = $900 Thousand This was an extensive check-kiting scheme whereby the accused defrauded two banks and one credit union for about $900,000. However, over a period of seven months, $16,000,000 of bank deposits were generated, mostly involving checks issued to or from the controlled accounts operating within the kite. Removal of these checks issued within the circle of controlled accounts reduced total deposits to less than $800,000 of money actually received from outside sources. In preparation for trial in September 1980, a unique accounting schedule was designed to show the jury the chronology of... Read More...

Honorable S.H.S. Hughes

Financial Institution Public Inquiry The Collapse of Atlantic Acceptance Corporation This was my first case after a “Big 8” audit partner had challenged me to decide whether I wanted to drive rally cars or be a professional auditor.  Well, I moved on when the late Brian McLaughlin asked me to join their insolvency group in February 1972.  At the time, Brian was working on a Public Inquiry. My first assignment was to proofread a draft report of the Public Inquiry entitled ‘Report of The Royal Commission Appointed to Inquire into the Failure of Atlantic Acceptance Corporation Limited’.  By way of... Read More...